• The Central Bank of the United Arab Emirates (CBUAE) has signed an agreement with Abu Dhabi-based G42 Cloud and R3 to implement its central bank digital currency (CBDC).
• The CBDC strategy was first unveiled in February and seeks to facilitate domestic and cross-border payments, as well as financial inclusion.
• The “mBridge” system will be launched in the next 12–15 months, with proof-of-concept work for bilateral CBDC bridges with India also on the agenda.
UAE Central Bank Sign Deal For CBDC Strategy
The Central Bank of the United Arab Emirates (CBUAE) has signed an agreement with Abu Dhabi’s G42 Cloud and digital finance services provider R3 to be the infrastructure and technology providers of the CBDC implementation. This move comes after the unveiling of their CBDC strategy in February which aims to position UAE as a global financial hub by facilitating domestic and cross-border payments, as well as boosting financial inclusion.
The mBridge System
The initial phase of this strategy includes launching “mBridge”, which will facilitate CBDC transactions for international trade, along with proof-of-concept work for bilateral CBDC bridges with India, and domestic CBDC issuance for wholesale and retail use. This stage is expected to be completed within 12–15 months according to the announcement made by the central bank.
Goals Of The Strategy
The goal behind this strategy is to create a cashless society in UAE that can make digital payments faster, more secure, easier, safer and cost efficient than traditional banking methods. It also aims at promoting financial inclusion through accessiblity of digital payment systems to people who are not previously connected to formal banking systems.
Speech By Governor Khaled Mohamed Balama
During his speech on Feb 12th when unveiling this strategy , governor Khaled Mohamed Balama said: “The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalization journey and promote financial inclusion.”
Debates Over Use Cases In US
Meanwhile debates over viability of asset continue in United States with RepubliCan senator Pat Toomey questioning use cases for stablecoins such as Facebook’s Libra in terms of privacy concerns , consumer protection , anti money laundering compliance etc .