The Central Bank of the United Arab Emirates (CBUAE) has announced the commencement of the initial phase of its central bank digital currency (CBDC) strategy, marking an important stride towards the adoption of digital currency in the region.
In collaboration with R3 and G42 Cloud, the strategy aims to explore the utility of CBDC for both retail and wholesale applications, ensuring a robust infrastructure and technology base for the digital dirham.
Strategic partnerships and phases
The strategy’s rollout began with a signing event on March 23, highlighting partnerships with R3, a key player in CBDC technology, and G42 Cloud, an entity within the AI conglomerate G42. This first phase encompasses three critical components: the launch of Project mBridge, a proof-of-concept for a CBDC bilateral bridge with India, and a proof-of-concept for domestic use. These initiatives point to the CBUAE’s commitment to addressing cross-border payment challenges, advancing financial inclusion, and transitioning towards a cashless society.
Towards a digital economy
Embedded within the CBUAE’s Financial Infrastructure Transformation Programme, the CBDC strategy aims to enhance the efficiency of domestic and international payments. Also, it mandates the integration of the Digital Dirham by all UAE-licensed financial institutions by 2026. Project mBridge and Project Aber, with the Saudi Central Bank, serve as foundational projects, underscoring the CBUAE’s role as a pioneer in digital currency exploration.
The collaboration with R3 and G42, alongside the projected 12 to 15-month implementation period, is expected to set a clear pathway for the digital dirham’s integration into the financial ecosystem, reinforcing the UAE’s position as a forward-thinking participant in the global digital economy.
