UAE Central Bank launches national strategy for digital dirham

Announce The Central Bank of the United Arab Emirates has announced the start of serious preparations to issue a Central Bank-issued digital currency (CDBC) for use in retail and wholesale operations. This official announcement came from the Central Bank of the United Arab Emirates last Saturday.

And he has The Central Bank launched the “digital Dirham” implementation strategy During the event, agreements were signed with R3 and G42 Cloud, which will provide infrastructure and technology support for the digital currency.

Steps for launching the digital dirham

This is the first step in implementing the strategy.Digital Dirham“One of the nine most important initiatives included in the Financial Infrastructure Transformation (FIT) program of the Central Bank of the United Arab Emirates. This strategy is based on three main axes which are expected to be implemented over a period of 12 to 15 months.

The first axis is the launch of a first version of the “mBridge” platform to facilitate cross-border financial transactions in the field of international commercial settlements using digital currencies. The Central Bank of the United Arab Emirates recently completed this First offer on this platform Using digital dirham and Chinese digital yuan, worth $13.6 million.

The second axis is to explore the creation of digital bridges with the Central Bank of India, which is progressing in the technological field to develop the confidentiality of its digital currency. Finally, the bank will launch pilot projects to study use cases of the digital dirham at the local level in wholesale and retail payments.

Pioneering initiatives and digital currencies in the Gulf

This project is seen as a continuation of the bank's program to develop and modernize the financial infrastructure of the UAE banking sector. This announcement comes after the completion of two pioneering initiatives: the mBridge multilateral pilot project to study central bank digital transactions, And the “transitional” project The bilateral relationship with the Central Bank of Saudi Arabia.

The Central Bank of Saudi Arabia and the Central Bank of the United Arab Emirates announced the success of 2019 “Transitional” project To test a central bank digital currency. whose aim was to study the possibility Use distributed ledger technology (Blockchain) to facilitate cross-border financial payments.

Emirates Bank has urged financial institutions operating in the Emirates to participate in the digital dirham issuance experiment with a view to its full adoption by 2026.

The UAE is at the forefront of adopting digital currencies

This trend confirms the UAE's ambition to lead digital transformation efforts in the financial sector. This reflects a growing interest in digital currencies in Arab Gulf countries. The partnership with G42 is not limited to the issuance of digital currency, but rather envisages applications of artificial intelligence in several vital areas such as energy, healthcare and utilities.

As for R3, it is a leading global company in the field of blockchain technology and has already contributed to important projects in cooperation with the Bank for International Settlements and other major financial institutions.

The UAE Central Bank said the issuance of the “digital Dirham” would be a step forward for the country in strengthening the payments infrastructure. It will also help prepare the country for future financial transformations linked to the exchange of “tokens” based on Blockchain technology. Which is expected to become common in both financial and non-financial uses in the future.

Khaled Mohammed Al-Amaa, Governor of the Central Bank of the UAE, stressed that digital currency "will accelerate the pace of digital transformation and strengthen financial inclusion. We look forward to exploring the opportunities that digital currency will provide to the economy and society.”

It is worth noting that the UAE is a growing hub in the world of digital assets. Burj Tower Capital and Deus Ex have launched a joint project worth $250 million to develop the infrastructure of these assets in the region.