Crypto-Friendly UAE to Jump Aboard CBDC Wagon Alongside India, China: Details

Transactions processed via CBDCs register permanent and unchangeable records on the blockchain.

Written by Radhika Parashar, Edited by Richa Sharma | Updated: 13 February 2023 20:50 IST

Crypto-Friendly UAE to Jump Aboard CBDC Wagon Alongside India, China: Details

Photo Credit: Pixabay/ Danor Aharon

The central bank of the UAE (CBUAE) is overseeing the creation and trials of the digital dirham

Highlights

The UAE’s CBDC could be released by 2026
The UAE will launch CBDC-compatible instant payments platform
China, Turkey, and Kazakhstan, among other nations, working on CBDCs

The UAE is all geared up to take crucial steps to transform its existing financial systems with emerging next-gen fintech tools. After creating a supportive ecosystem for the crypto industry, the UAE is now turning its focus to include its central bank digital currency (CBDC) to the economy. CBDCs are built on the blockchain network and digitally represent existing fiat currencies. Transactions processed via CBDCs not only register permanent and unchangeable records on the blockchain, but also slash all kinds of transaction costs, even for instant international payments.

As part of its Financial Infrastructure Transformation Programme (FIT), the financial authorities of the UAE have begun working on developing the required technical and cyber security support.

“The programme comprises implementation of nine key initiatives. The first stage includes a series of digital payment infrastructures and services such as the launch of a card domestic scheme, an instant payments platform, and the issuance of CBDC for cross-border and domestic uses,” said an official post detailing the focus points for FIT.

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The UAE is backing the creation of a cashless society in the coming years. Its CBDC plans are expected to roll-out in full potential by 2026.

The central bank of the UAE (CBUAE) is overseeing the creation and trials of the digital dirham.

The UAE bets that blockchain-powered fintech tools could improve regulatory compliance, reduce cost of operation, enhance innovation, and strengthen financial security in the next decade.

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Last year, the UAE released a set of elaborate laws to govern its crypto sector. The nation wishes to establish itself as a hub for businesses around the digital assets sector.

Dubai created a special regulatory unit called the Virtual Assets Regulatory Authority (VARA) to oversee crypto-related businesses there.

The UAE now joins India, China, UK, Turkey, and Kazakhstan, among other nations, which have already paced forward in terms of creating their respective CBDCs.

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Further reading: Cryptocurrency, UAE, CBDC, Digital Dirham

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More