The Central Bank of the UAE has become the latest central bank interested in issuing a Central Bank Digital Currency (CBDC).
According to a report issued by “gulfnews”, the UAE regulator has prioritized the development of the Central Bank’s digital currency roadmap 2023-2026.
Earlier, the Central Bank of the UAE showed interest in digital currencies for central banks and established some key relationships in this field.
Several global players, including the central banks of China, Thailand and Hong Kong, have joined forces in a multi-digital central bank bridge to test cross-border payments.
In addition, the BIS Innovation Hub (BISIH) has joined the project.
In the latest roadmap, the UAE regulator set seven goals, among others, which made it clear that it wanted to lead the digital transformation of the country’s financial services sector with the help of artificial intelligence and big data solutions.
In addition, the UAE Central Bank wants to enhance financial inclusion over the four-year plan through a digital identity infrastructure, and the technology will be used in inspection, monitoring and insurance systems.
UAE Interest in CBDC Currencies:
Earlier, the UAE regulator published a joint report on the benefits of using the Payment Distribution System with the Saudi Central Bank (SAMA).
The two banks considered running a joint one-year pilot program with central bank digital currencies.
The joint report indicated the following:
The project confirmed that the cross-border dual currency issuance was technically feasible and that it was possible to design a distributed payment system that would provide the two countries with a significant improvement over centralized payment systems in terms of architectural flexibility.
It is worth noting that many other central banks around the world are also jumping in to study the possibility of issuing a digital currency.
French and Swiss regulators have begun experimenting with a cross-border transaction with two digital bank currencies.
However, the People’s Bank of China is still ahead of the curve with the massive public trials of the digital yuan that the government is about to launch.