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UAE Central Bank Advances CBDC Implementation

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(Gold News) – Central Bank of the United Arab Emirates (CBUAE) Announce It has formalized its Central Bank Digital Currency (CBDC) strategy, which will eventually lead to the creation of a digital dirham for domestic and cross-border payments.

The CBDC strategy is one of nine initiatives developed by the CBUAE as part of its Financial Infrastructure Transformation (FIT) program. According to the central bank, “a CBDC is a risk-free form of digital currency issued and guaranteed by a central bank, and is a safe, cost-effective and efficient means of payment and store of value.”

G24 Cloud, Abu Dhabi’s leading artificial intelligence and cloud computing company, and R3, a leader in digitalization of financial services, participated in the signing ceremony and will serve as infrastructure and technology providers for the CBDC.

CBUAE Several CBDC schemes have been tried beforeincluding Project Aber, launched in 2020 in conjunction with the Saudi Central Bank, “confirmed the possibility of using digital currencies issued by the two central banks to settle cross-border payments.”

Also carried out the first real-valued cross-border CBDC pilot under the “mBridge” project In 2022, cooperate with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Research Institute of the People’s Bank of China and the Bank for International Settlements.

Now, the CBUAE is preparing to enter the next phase of the digital dirham rollout by implementing its CBDC strategy.

The first phase will take place over the next 12 to 15 months with three goals: soft launch of “mBridge”, CBDC transactions to facilitate international trade, proof-of-concept work Bilateral CBDC bridge with Indiaone of the UAE’s largest trading partners, and domestic CBDC issuance for wholesale and retail use.

The UAE expects the integration of the digital dirham will help address pain points in domestic and cross-border payments, enhance financial inclusion, and help facilitate the transition to a cashless society.

“This will further strengthen the UAE’s payments infrastructure, provide additional robust payment channels and ensure a resilient and reliable financial system,” the central bank said. “More importantly, the CBUAE aims to ensure that the UAE is ready to integrate payments infrastructure with the potential future of a tokenized world, the tokenization of financial and non-financial activities.”

“The CBDC is part of the CBUAE’s FIT program, which will further strengthen and strengthen the UAE’s position as a leading global financial center,” said CBUAE Governor Khaled Mohamed Balama. “The launch of our CBDC strategy marks a critical step in the country’s currency and payments development. A CBDC will accelerate our digitization and boost financial inclusion.”

Amid the recent shocks to the banking system, CBDCs remain a hot topic and the focus of governments around the world.Nigeria is finally starting to see some Adopt its CBDC – eNiara – After a shortage of physical cash forced Nigerians to explore alternative payment methods, including digital Niara.

In the U.S., several lawmakers, including Florida Gov. Ron DeSantis, have opposed the creation of a dollar CBDC, who has Calls for a ban on the creation of digital dollarsRepublican Senator Ted Cruz proposed a bill to prevent The Federal Reserve launched a “direct-to-consumer” central bank digital currency, and Republican Rep. Tom Emmer, who Legislation has been introduced to prevent The Federal Reserve directly issues a central bank digital currency (CBDC).

Disclaimer: The views expressed in this article are those of the author and may not reflect the views of the author Kitco Metals Every effort has been made by the author to ensure the accuracy of the information presented; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not an invitation to any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the authors of this article disclaim liability for loss and/or damage resulting from the use of this publication.

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