UAE Central Bank to Launch CBDC for Domestic, Cross Border Payments

Lavina Daryanani
Source: Global Media Insight

The Central Bank of the United Arab Emirates newly launched a Financial Infrastructure Transformation [FIT] program. The same intends to enhance the pace of digital transformation of the financial services sector. Specifically, this initiative aims to promote digital transactions and encourage innovation in the space. This, in turn, will sharpen UAE’s prospects to become the financial and digital payment hub.

Explicitly, the program has nine initiatives and launching a central bank digital currency is one among them. According to the official statement, the CBDC will be launched to cater to the gaps and hindrances associated to international payments. Additionally, it will “help drive innovation for the domestic payments,” according to the statement.

The CBDC will be launched for both cross border and domestic use.

Source: CBUAE

UAE government aims to drive financial inclusion

Parallelly, the government will also launch a card payment platform to “facilitate the growth of e-commerce” and an instant payments platform to “support financial inclusion and enable a cashless society.”

The launch of these digital payment infrastructures, including the issuance of a CBDC, are a part of the first stage. Notably, the government aims to “drive financial inclusion, promote payment innovation, security and efficiency, and achieve a cashless society” by doing so.

According to His Excellency Khaled Mohamed Balama, Governor of the CBUAE, the FIT program “will support a thriving UAE financial ecosystem and its future growth.”

Furthermore, the Governor said,

“We will work with our partners to implement the Program, achieve its goals, accelerate the adoption of digital services in the financial sector and attract the best talent.”

In another recent development, Dubai’s Virtual Assets Regulatory Authority [VARA] recently released a ten-part rulebook outlining various principles and goals. The same entailed rules pertaining to licensing, marketing, issuance of assets, and AML obligations. According to the same, the issuance and all activities entailing “anonymity-enhancing cryptocurrencies” are now forbidden.

Read More: Cryptocurrency: Dubai To Ban Privacy Coins