The Central Bank of the United Arab Emirates has become the latest monetary regulator with an interest in issuing a central bank digital currency (CBDC). According to a Gulf News report, the UAE regulator has made the issuance of a digital fiat priority in its 2023-2026 roadmap.
Earlier, the UAE central bank showed interest in CBDCs and made a few key ties in the space. It joined several other global counterparties, including the central banks of China, Thailand and Hong Kong in a multiple CBDC bridge to test cross-border payments. Additionally, the project was joined by the BIS Innovation Hub Centre (BISIH).
In the latest roadmap, the UAE regulator has set seven objectives. Among others, it wants to drive digital transformation in the country’s financial services sector with the help of Artificial Intelligence and big data solutions.
In addition, the central bank wants to bolster financial inclusion over the 4-year plan with its digital ID infrastructure and will push the use of technology in inspection, monitoring and insurance systems.
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UAE’s Interest in CBDC
Earlier, the UAE regulator published a joint report on the benefits of using a distributing payment system with the Saudi Central Bank (SAMA). Moreover, the two banks mulled over running a one-year joint pilot program with CBDCs.
“The project confirmed that a cross-border dual issued currency was technically viable and that it was possible to design a distributed payment system that offers the two countries significant improvement over centralized payment systems in terms of architectural resilience,” the joint report cited.
Meanwhile, other central banks around the globe are jumping in to study the prospect of issuing a digital currency. Furthermore, the French and Swiss regulators initiated a cross-border transaction trial with two CBDCs. But, the People’s Bank of China remains at the forefront with its massive public digital yuan trials.