UAE central bank to issue CBDC as part of its financial transformation program

The Central Bank of the United Arab Emirates (CBUAE) plans to launch a central bank digital currency (CBDC) for cross-border and domestic use as part of the first of its recently launched Financial Infrastructure Transformation (FIT) program.

In a recent announcement, CBUAE introduced the FIT program and highlighted its goal of supporting the country’s financial services sector. The central bank emphasized that the program will promote the development of digital transactions and ensure the competitiveness of the UAE as a center for financial and digital payments.

The first phase of the FIT program includes the release of the CBDC. According to the central bank, issuing a CBDC “will solve the problems and inefficiencies of cross-border payments and help stimulate innovation for domestic payments accordingly.” According to Khaled Mohamed Balama, Governor of CBUAE, the FIT program will “support the UAE’s thriving financial ecosystem and its future growth.”

In addition to the CBDC, the government also plans to launch a single card payment platform to “promote the growth of e-commerce” and an instant payment platform to “support financial inclusion and create a cashless society” in the first phase of the program. .

The FIT program includes nine initiatives, including those that will be implemented in the first phase. Post-phase 1 initiatives include the Know Your Customer e-platform and an innovation hub.

Lawyer Explains New Federal Law on Virtual Assets in the United Arab Emirates

On February 7, the Dubai Virtual Asset Regulatory Authority (VARA) released the long-awaited “Regulations for Full Market Products”, which includes detailed guidelines for dealing with virtual assets for projects operating in the emirate. The laws include a ban on the issuance of “enhanced anonymity cryptocurrencies”, also commonly referred to as “privacy coins”, and related activities.

On February 10, various players in the UAE expressed their views on the new development. Saqr Ereikat, co-founder of Crypto Oasis, recently told Cryptooshala that privacy coins are different from Bitcoin (BTC) and Ether (ETH), where transactions can be traced. The Executive Director said they presented a unique problem as they could potentially facilitate illegal activities.

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