CBUAE Launches Central Bank Digital Currency Strategy
The Central Bank of the UAE (CBUAE) has introduced its Central Bank Digital Currency (CBDC) strategy, called 'The Digital Dirham.' This significant move is part of the UAE's digital transformation journey.
G42 Cloud and R3 to Support CBDC Implementation
In a joint signing ceremony, G42 Cloud and R3 were announced as infrastructure and technology providers for the CBUAE's CBDC implementation. This partnership is one of nine initiatives in the CBUAE's Financial Infrastructure Transformation (FIT) Programme.
Three Pillars of the CBUAE's CBDC Strategy
The Digital Dirham strategy is built on three main pillars:
- The soft launch of mBridge
- Bilateral CBDC bridges proof-of-concept with India
- Domestic CBDC issuance proof-of-concept for wholesale and retail usage
mBridge will facilitate cross-border CBDC transactions for international trade settlement within 12 to 15 months.
Benefits of CBDC for UAE's Financial Ecosystem
According to the CBUAE, adopting CBDC as digital money issued and guaranteed by the central bank will provide secure, cost-effective, and efficient payments. Additionally, it will enhance financial inclusion, advance cashless society efforts, and strengthen the UAE's payment infrastructure.
CB UAE's Previous CBDC Initiatives
The CBUAE has a history of successful CBDC initiatives, including Project 'Aber' in collaboration with the Saudi Central Bank in 2020. In 2022, the CBUAE launched the 'mBridge' pilot program, a real-value cross-border CBDC project, alongside the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China, and the Bank for International Settlements.
BREAKING: UAE Central Bank launches 'The Digital Dirham' CBDC strategy, marking a major milestone in the country's digital transformation.
— Paryte (@Parytecom) March 23, 2023
Governor Khaled Mohamed Balama's Vision for CBDC
CBUAE governor Khaled Mohamed Balama sees CBDC as a vital initiative within the FIT program to reinforce the UAE's position as a leading global financial hub. He believes that launching the CBDC strategy is essential in the country's evolution of money and payments, accelerating digitalization and promoting financial inclusion. Balama looks forward to the opportunities CBDC will bring to the wider economy and society.
