The Central Bank of UAE (CBUAE) has taken a major step towards implementing its Central Bank Digital Currency (CBDC) Strategy by signing a partnership agreement with G42 Cloud and R3.Â
The CBDC is one of the nine initiatives of the CBUAE’s Financial Infrastructure Transformation (FIT) Programme.
The CBUAE is now ready for the next major milestone in the CBDC journey after accomplishing two major successes.
The first success came from Project “Aber” with the Saudi Central Bank in 2020.
The second success came in 2022. It was the first real-value cross-border CBDC pilot under the “mBridge” project with the Hong Kong Monetary Authority, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements.
The CBDC will serve as a secure, cost-effective, and efficient form of payment and a store of value, providing an additional robust payment channel and ensuring a resilient and reliable financial system.
The first phase of the CBDC implementation will involve a soft launch of mBridge to facilitate real-value cross-border CBDC transactions for international trade settlement, proof-of-concept work for bilateral CBDC bridges with India, and proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.
Khaled Mohamed Balama, the Governor of the CBUAE, said, “CBDC will accelerate our digitalization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.”
The CBUAE’s CBDC Strategy’s first phase is expected to be completed over the next 12 to 15 months. It will further position and solidify the UAE as a leading global financial hub.
