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today’s Central Bank of the United Arab Emirates Announce R3 is the technology provider for its Central Bank Digital Currency (CBDC) work, and the G42 Cloud for infrastructure.
The three pillars of the Phase 1 strategy have been announced and are planned to be completed within 12 to 15 months.first of all MBridge projectwholesale Cross-border CBDC The solution, in partnership with the Bank for International Settlements and the central banks of China, Hong Kong and Thailand, is intended to be piloted during this period. Given that MBridge uses a custom permissioned blockchain, we suspect R3 is not involved.
Second, bilateral cross-border CBDC projects with India announced last week. Finally there are domestic initiatives for wholesale and retail CBDCs, the proof of concept of which will be completed within that time frame.
The central bank has outlined its motivations for addressing domestic and cross-border payments pain points, the latter of which have been widely debated globally due to delays and high costs. The UAE has a large immigrant workforce, so the cost of remittances is a key issue.
Other drivers are:
- financial inclusion
- Support a cashless society
- Elasticity and optionality of payment infrastructure
- Support the tokenization of financial and non-financial activities.
Emphasize the tokenization motivation, which may have been a key driver in the decision to partner with R3. With its Corda enterprise blockchain and relationships with many major banks, R3 is involved in many tokenization initiatives. Six digit exchange (SDX), one of the first fully regulated digital security exchanges, based on Corda, market nodea tokenization joint venture between SGX and Temasek.
SDX and R3 are also involved in cross-border wholesale CBDC Jura project Involves the central banks of France and Switzerland.
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