- The United Arab Emirates Central Bank plans to introduce a digital currency for both local and global use.
- The program’s first stage of financial infrastructure transformation includes the release of a digital edition of the national currency of the United Arab Emirates.
The Central Bank of the United Arab Emirates has unveiled a new strategy that includes open finance and a new digital currency to speed up the digital transformation of the financial services industry.
Nine projects in total, including the establishment of a CBDC, are part of the program.
UAE’s decision to launch CBDC comes just one week after the UK said that the decision to launch of its digital pound-“Britcoin” would be made by 2025.
The new scheme, known as the Financial Infrastructure Transformation (FIT) program, includes plans for the area to issue its own central bank digital currency (CBDC) for internal and international use.
The regulator explained that these digital payment measures would enhance economic inclusion, encourage payment creativity, safety, and effectiveness, and create a cashless society.
The Financial Infrastructure Transformation (FIT) program, according to the CBUAE, intends to help the financial services industry, encourage digital transactions, and boost the UAE’s efficiency so that it may become a center for digital payments, creativity, and financial services.
A CBDC would also resolve the issues and complexity of cross-border payments and help stimulate developments for domestic payments, respectively, the central bank claims.
“The FIT programme would help a vibrant UAE financial ecosystem and its future expansion,” according to Khaled Mohamed Balama, Governor of the CBUAE.
Initiatives involving virtual assets and cryptocurrencies have gathered momentum recently as banking regulators work to simplify international transactions and encourage innovation in the payments sector. Dubai, one of the richest of the seven emirates in the UAE, recently established crypto laws for companies offering services related to virtual assets.
In order to establish effective supervisory processes and guarantee financial stability, the CBUAE will also embrace cutting-edge supervisory technologies and data management systems as part of the FIT programme.
The CBUAE stated that the second stage entails the creation and use of numerous digital infrastructures, including the installation of Financial Cloud, eKYC, and Open Finance Platforms.
These digital infrastructures will bolster their safety and operational endurance while also lowering operating costs, enhancing innovation, and improving the customer experience.