As part of a new initiative to speed up digital transformation, the central bank of the United Arab Emirates (UAE) intends to create a central bank digital currency (CBDC) such as digital dirham for domestic and international payments.
One of the nine projects included in the central bank’s Financial Infrastructure Transformation Program, which was unveiled on Sunday, is the release of a digital version of the UAE’s dirham.
Digital Dirham Project
The project’s initial phase establishes a “series of digital payment infrastructures and services,” including the issuing of a CBDC for “cross-border and domestic uses,” according to the statement.
“These digital payment initiatives will drive financial inclusion, promote payment innovation, security and efficiency, and achieve a cashless society,” the announcement said, adding that a digital dirham will “address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments respectively.”
The issuing of CBDCs is being considered by jurisdictions all over the world to allow advancements in the banking and payments industries, and the Bank of England recently joined the discussion by announcing its own plans for a digital pound.
One of the UAE’s emirates, Dubai, published extensive regulations last week to govern the cryptocurrency industry. These regulations include the creation of a licensing system for crypto businesses and a statement that the emirate wants to ban the issuance of, and activities related to crypto that enhances anonymity.
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