The UAE is set to take significant steps to transform its existing financial systems with emerging next-generation fintech tools. After creating a supportive ecosystem for the crypto industry, the UAE is now turning its attention to incorporating its central bank digital currency (CBDC) into the economy. CBDCs are built on a blockchain network and digitally represent existing fiat currencies. Transactions processed through CBDCs not only create permanent and immutable records on the blockchain, but also reduce transaction costs of all kinds for instant international payments.
As part of its Financial Infrastructure Transformation Program (FIT), the UAE financial authorities have started working on developing the necessary technical and cyber security support.
“The program includes implementation of nine key initiatives. The first phase includes digital payment infrastructure and a range of services such as the launch of the card domestic scheme, instant payment platform, and issuance cbdc for cross-border and domestic use,” said a official post Detailing the focus points of FIT.
United Arab Emirates Supporting the creation of a cashless society in the years to come. Its CBDC plans are expected to roll-out at full capacity by 2026.
The Central Bank of the UAE (CBUAE) is overseeing the creation and testing of the digital dirham.
The UAE believes that blockchain-powered fintech tools can improve regulatory compliance, reduce operating costs, drive innovation and strengthen financial security over the next decade.
Last year, the United Arab Emirates issued a set of detailed laws to govern its crypto sector. The nation is looking to establish itself as a hub for businesses in the digital assets sector.
Dubai created a special regulatory body called Virtual Assets Regulatory Authority (VARA) There to oversee crypto-related businesses.
The UAE now joins India, China, the UK, Turkey and Kazakhstan, among other countries, that have already moved forward with creating their respective CBDCs.