The Central Bank of UAE is ready to start with its Central Bank Digital Currency (CBDC) implementation. The Digital Dirham project will employ G42 Cloud and enterprise blockchain firm R3
The Central Bank of UAE (CBUAE) has launched the implementation of the Central Bank Digital Currency (CBDC) Strategy “The Digital Dirham”.
The launch follows a number of technical trials. These include Project Aber with the Saudi Central Bank in 2020 and real-value cross-border CBDC pilot under the mBridge Project, jointly conducted with BIS and the central banks of Hong Kong, Thailand, and China in 2022.
It was also recently reported that the Central Bank of the UAE and the Reserve Bank of India have agreed to jointly explore innovation in financial products and services, especially CBDCs.
Together with G42 Cloud and R3, involved in the project as the infrastructure and technology providers respectively, the bank now proceeds to the first phase of the previously announced CBDC Strategy. It is expected to complete over the next 12 – 15 months.
The first implementation phase consists of three major milestones:
- the soft launch of mBridge to facilitate real-value cross-border CBDC transactions for international trade settlement,
- proof-of- concept work for bilateral CBDC bridges with India,
- proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.
The CBDC Strategy is one of the nine initiatives of the CBUAE’s Financial Infrastructure Transformation (FIT) programme.
According to H.E. Khaled Mohamed Balama, the Governor of the CBUAE, Digital Dirham CBDC implementation will be “a key step in the evolution of money and payments in the country”, that has a potential to accelerate UAE’s digitalisation journey and promote financial inclusion.