The UAE Central Bank (CBUAE) has started to implement the first part of its CBDC strategy, a phase that is expected to be completed over the next 12 to 15 months.
The beginning of “The Digital Dirham” was marked at a jointly held signing ceremony with key infrastructure and technology providers that it has been engaging with, G42 Cloud and R3 respectively.
The CBUAE said is looking to achieve three things by implementing the strategy. Beginning with the soft launch of“mBridge” it plans to facilitate the use of a digital currency for cross-border or international payments.
It is also seeking to prove the concept of such a currency in key areas; for bilateral CBDC bridges with India, one of the UAE’s top trading partners and to show that a domestic CBDC can be issued for wholesale and retail use.
The CBUAE previously engaged in successful CBDC initiatives such Project “Aber” with the Saudi Central Bank, in 2020, which confirmed the possibility of using a digital currency issued by two central banks to settle cross borders payments.
It also worked on the first real-value cross-border CBDC pilot under the “mBridge” project with 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 in 2022.
Speaking at the ceremony, H.E. Khaled Mohamed Balama, the Governor of the CBUAE, said: “CBDC is one of the initiatives as part of the CBUAE’s FIT programme, which will further position and solidify the UAE as a leading global financial hub. The lauch of our CBDC strategy marks a key step in the evolution of money and payments in the country.
“CBDC will accelerate our digitalisation journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.”
