February 13, 2023

UAE Eyes Launching Its CBDC

UAE Eyes Launching Its CBDC Featured Image

United Arab Emirates bitcoin flag, national flag cryptocurrency concept black background

The Central Bank of the UAE (CBUAE) plans to launch a central bank digital currency (CBDC) for domestic and cross-border use, a step that is included in its Financial Infrastructure Transformation Programme (FIT programme).

FIT, launched today, is meant to speed up the digital transformation in the financial services sector as part of a wider strategy aimed at enabling the Emirati central bank to be among the top central banks globally, CBUAE said in a press release.

The issuance of the CBDC will be in the first stage of implementing the FIT program, the bank noted, pointing out that the digital currency would address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments, respectively.

The FIT program has nine initiatives; card domestic scheme, eKYC, open finance, supervisory technology (SupTech), instant payment platform, financial cloud, and excellence and customer service in addition to CBDC.

The card domestic scheme is the UAE’s first unified, secured, and efficient card payment platform to facilitate the growth of e-commerce and digital transactions in the country.

Earlier this month, Dubai’s Virtual Asset Regulatory Authority (VARA), the body that regulates virtual assets in the emirate, issued new guidelines for virtual asset service providers to ensure economic sustainability and cross-border financial security.

According to a press release by the Government of Dubai, the Virtual Assets and Related Activities Regulations 2023 seeks to reach greater clarity on the expected level of operator responsibility by offering gold-standard risk assurance and Anti-Money Laundering (AML) standards, which all licensed entities in Dubai are expected to adhere.

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