The central bank of the United Arab Emirates said it has started implementing its digital currency strategy with partners G42 Cloud and R3. According to the central bank, the digital currency initiative is expected to “further position and consolidate the UAE as a leading global financial center.”
CBDC Strategy to Focus on Three Pillars
The central bank of the United Arab Emirates (UAE) recently said that it would start implementing its digital currency strategy with its two partners G42 Cloud and R3. According to a report, the two partners of the UAE’s main bank are expected to play a key role in helping the central bank achieve CBDC implementation.
As explained in a recent Arabian Business report, the first phase of the central bank’s strategy, which is expected to take place in the next 12 to 15 months, will focus on three key pillars. Proof-of-concept work for bilateral central bank digital currency (CBDC) bridges with India, as well as the preliminary launch of the M-bridge, are two of the key pillars. Proof-of-concept work for national CBDC issuance covering wholesale and retail use is the third key pillar to be considered.
Commenting on why the Central Bank of the United Arab Emirates (CBUAE) decided to go ahead with its CBDC initiative, the bank’s Governor, Khaled Mohamed Balama, touted this as a move likely to reinforce the country’s position as a leading global financial center. He also suggested that CBDC implementation is likely to promote financial inclusion.
“CBDC is one of the initiatives as part of CBUAE’s FIT (Financial Infrastructure Transformation) program, which will further position and consolidate the UAE as a leading global financial hub. The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the economy and society in general,” the governor said.
Prior to its latest CBDC announcement, CBUAE was involved in several digital currency initiatives, including its collaboration with the Central Bank of Saudi Arabia in 2020. The bank’s other initiatives include its cross-border CBDC pilot program with the Hong Kong Monetary Authority and the Bank of Thailand in 2022. The Digital Currency Institute of the People’s Bank of China and the Bank for International Settlements were also part of this initiative, the report added.
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