The Central Bank of the United Arab Emirates announced the launch of a digital currency strategy named the "Digital Dirham," following the signing of an agreement with companies "G42 Cloud" and "R3" to begin implementing the strategy. In a statement on Thursday, the bank indicated that "G42 Cloud" was chosen to provide infrastructure services for the project, while "R3" would offer technological services.
The first phase of the Central Bank's digital currency strategy, which is expected to be completed within the next 12 to 15 months, focuses on three main pillars: the pilot launch of the Bridge platform aimed at facilitating cross-border digital currency financial transactions and settling international trade payments; bilateral cooperation on proving the concept of Central Bank Digital Currencies (CBDCs) with the Republic of India, the UAE's largest trading partner; and efforts to prove the concept of a digital currency for CBDCs for use by individuals, companies, and institutions in the UAE.
The CBDCs issued and backed by the Central Bank represent a form of risk-free digital money and stored value. They are characterized by being a safer and faster means of conducting cross-border payments at a lower cost. The Central Bank's digital currency will help alleviate current challenges in local and cross-border payments, achieve financial inclusion, and reach a cashless society. Additionally, it will enhance the payments infrastructure in the UAE and provide additional strong channels for local and international payments, ensuring a resilient and reliable financial system.
Central Bank Governor Khaled Mohamed Balama stated, "The initiative for Central Bank Digital Currencies is part of a financial infrastructure transformation program that will solidify the UAE's leading position as a global financial hub." He noted that the strategy aims "to accelerate the transition to a digital economy and enhance financial inclusion."
