As the first phase of its financial infrastructure transformation (FIT) program, the Central Bank of the United Arab Emirates (CBUAE) intends to introduce a central bank digital currency (CBDC) for both local and international usage.
The CBUAE recently announced the FIT initiative and emphasized its goal of assisting the nation’s financial services industry. The scheme, according to the central bank, will support digital transactions and boost the UAE’s competitiveness as a center for finance and electronic payments.
The issuing of a CBDC is part of the FIT program’s first phase. A CBDC would “address the issues and inefficiencies of cross-border payments and assist stimulate innovation for domestic payments, respectively,” the central bank claims.
The FIT program would “help a vibrant UAE financial ecosystem and its future expansion,” according to Khaled Mohamed Balama, Governor of the CBUAE.
During the first stage of the initiative, the government also intends to introduce a CBDC, a unified card payment network to “promote the expansion of e-commerce,” and an instant payments platform to “encourage financial inclusion and allow a cashless society.”
Nine projects total, including the ones that will be carried out in the first stage, make up the FIT program. Following the first stage, initiatives will include an innovation center and an e-Know Your Customer portal.
The long-awaited “Full Market Product Regulations,” which contain thorough instructions on virtual asset activities for projects operating inside the emirate, were made available on February 7 by Dubai’s virtual asset regulatory body (VARA).
The regulations prohibit the issuance of “anonymity-enhanced cryptocurrencies,” often known as “privacy coins,” as well as associated activities.
On February 10, a number of stakeholders in the UAE voiced their opinions in reaction to the recent events. Co-founder of Crypto Oasis Saqr Ereiqat recently informed that privacy coins are distinct from Bitcoin BTC both ETH which allows for the tracking of transactions.
They pose a special difficulty, according to the administration, since they may be used to facilitate illegal activity.
