The United Arabs Emirate (UAE) has become the latest country to announce its intention to develop and launch a central bank digital currency (CBDC).
The UAE’s central bank announced yesterday that it is working on developing and launching a central bank digital currency. The apex bank outlined its three-year plan as it joins other countries in developing and issuing a CBDC.
According to regional news outlet Arab News, the UAE intends to finish developing the CBDC in three years. “The strategy supports the digital transformation of the UAE’s financial services sector, including adopting modern technology such as artificial intelligence and big data,” the report said.
The apex bank said it is adopting digital currencies because it wants to push financial institutions to go digital. The plan also involves the financial institutions developing a robust and secure cloud scheme for citizens.
According to the chairman of the Committee on Payments and Market Infrastructures, the CBDC will provide the UAE with the opportunity to start a new economy. UAE Central Bank committee has broadened its scope regarding CBDCs and cryptocurrencies in recent months. The local regulators have also become open to the cryptocurrency market and seek to actively regulate the sector rather than ban activities.
The apex bank also wishes to use the blockchain technology in various other sectors of the UAE economy. The technology has numerous features that would boost productivity and transparency within various sectors.
UAE announcing the launch of its CBDC research and development isn’t a surprise considering several countries have done so in recent weeks. China and a few other countries have made giant strides in this regard and are already testing their CBDCs to see how they perform in the world.
Central bank heads believe that digital currencies would allow them to catch up to the private financial institutions and continue to control the global system.