UAE to Launch and Test in-house Digital Currency

The Central Bank of the United Arab Emirates (CBUAE) has set the potential launch of an in-house Central Bank Digital Currency (CBDC) as part of its digital transformational strategies spanning 2023 to 2026.

The move by the UAE reaffirms the earlier discussion of a CBDC development between the UAE and other Gulf states before this time. 

While the plans reaffirm the region’s commitment to financial innovations, the UAE plans to reposition itself as a leader in this and other digital sectors by the end of the outlined strategic period.

As reported by the Gulf News, a total of seven areas are being projected to be transformed through the power of Artificial Intelligence and Big Data. Amongst the outlined plans is the need to overhaul its cloud infrastructure. Upon the security of this infrastructure, a thriving financial and insurance sector would be built per the Gulf News report.

While further details about the proposed CBDC are still not widely known, the timeline of 2023 - 2026 shows how definitive the nation is about its plans.

Pursuing CBDC is Now a Global Affair

The pursuit of a CBDC by Central Banks is now gaining traction around the world nowadays. Voices concern CBDC possess the right qualities to herald financial equality. 

While countries like the Bahamas, China, and Sweden are leading in pursuing these virtual forms of fiat money, other economies are also throwing the gauntlet per research and embracing this financial innovation. 

Also, the strain brought about by the COVID-19 pandemic, in particular, made authorities realise the potential importance of a CBDC, as consumers explored cashless options as provided by privately issued digital currencies. With many nations now invested in developing a CBDC, the fear of privacy, security, and compatibility with existing structure remain a major pain point Central Banks are billed to answer.

Image source: Shutterstock

Tags

• cbdc
• uae
• digital transformation