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

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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 its newly launched first Financial Infrastructure Transformation (FIT) initiative.

in the most recent announcement, CBUAE launched the FIT program and highlighted its aim to support the country’s financial services industry. The central bank emphasized that the plan will facilitate digital transactions and enhance the UAE’s competitiveness as a financial and digital payment hub.

The first phase of the FIT program includes the issuance of a CBDC. According to the central bank, the issuance of a CBDC will “address the problems and inefficiencies of cross-border payments respectively and help drive innovation in domestic payments.” According to CBUAE Governor Khaled Mohamed Balama, the FIT scheme will “support the prosperity of the UAE The financial ecosystem and its future growth.”

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

The FIT program has nine initiatives, including those that will be implemented in the first phase. Initiatives beyond Phase 1 include the e-Know Your Customer platform and Innovation Center.

related: Lawyers Explain United Arab Emirates’ New Federal Virtual Assets Law

On February 7, the Dubai Virtual Assets Regulatory Authority (VARA) Released the long-awaited “All Market Product Regulations”, These include comprehensive guidance on virtual asset activities for projects operating within the emirate. These laws include a ban on the issuance of “anonymity-enhancing cryptocurrencies” (also commonly referred to as “privacy coins”) and related activities.

Various players across the UAE on 10 February expressed his opinion to cope with new developments. Crypto Oasis co-founder Saqr Ereiqat recently told Cointelegraph that privacy coins are different from Bitcoin (bitcoin) and ether (Ethereum), where transactions can be traced. They pose unique challenges because they can enable illegal activity, the executive said.

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