The Central Bank of the United Arab Emirates (CBUAE) is inching closer to fully launching its central bank digital currency (CBDC) .
According to a statement on March 23, the CBUAE struck an agreement with Abu Dhabi’s G42 Cloud and digital banking services provider R3 to be the infrastructure and technology suppliers of the Central bank digital currency implementation.
In addition to tackling the issues of domestic and cross-border payments, the central bank claims it will also assist improve financial inclusion as the country looks to achieve a “cashless society.”
The soft launch of “mBridge,” which enables Central bank digital currency transactions for international trade, coupled with proof-of-concept development for bilateral CBDC bridges with India, and domestic CBDC issuance for wholesale and retail use make up the first phase of the CBDC plan.
The release stated that this stage is anticipated to be finished during the following 12 to 15 months.After the original unveiling of the policy on Feb. 12, the CBUAE 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.”
While the UAE aims to expand the possibilities for CBDC use cases, discussions about the asset’s potential in the US are still ongoing. In an effort to prevent the U.S. Federal Reserve from issuing a “direct-to-consumer” CBDC out of concern that it might be used as a spying tool, Republican Senator Ted Cruz introduced a bill on March 21.
While this was going on, a study published by a division of the U.S. Treasury asserted that the introduction of a CBDC into the economy would undermine banks, describing the harm as “significant” in times of stress.
On the other hand, due to severe shortages of paper money, Nigeria is seeing a rise in the use of its electronic currency, or eNaira. Nigeria currently has 13 million Central bank digital currency wallets in use, an increase of more than 12 times since October 2022.
Almost 95% of the world’s GDP, or 114 nations as of March, are investigating CBDCs. According to the Atlantic Council, a research organization based in the United States, 65 countries are already at an advanced stage.
