The UAE is preparing to take significant steps to transform its existing financial systems with emerging next-generation fintech tools. After creating a supportive ecosystem for the crypto industry, the UAE is now shifting its focus to bringing central bank digital currency (CBDC) into the economy. CBDCs are built on a blockchain network and digitally represent existing fiat currencies. Transactions processed through the CBDC not only register permanent and immutable records on the blockchain, but they also cut down on all kinds of transaction costs, even for instant international payments. instantly.
As part of the Financial Infrastructure Transformation (FIT) Program, UAE financial authorities have begun work to develop the necessary technical assistance and cybersecurity.
“The program includes the implementation of nine key initiatives. The first phase includes a range of digital payment infrastructure and services such as the rollout of a local card program, instant payment platform, and issuance. CBDC for cross-border and domestic use,” a official post details the focus points for the FIT.
The United Arab Emirates are advocating for the creation of a cashless society in the years to come. Its CBDC plans are expected to reach their full potential by 2026.
The Central Bank of the UAE (CBUAE) is overseeing the creation and testing of the digital dirham.
The UAE bets that blockchain-powered fintech tools can improve regulatory compliance, reduce operational costs, boost innovation, and enhance financial security over the next decade.
Last year, the UAE issued a complex set of laws to govern its cryptocurrency sector. The country aspires to become a hub for businesses around the digital asset sector.
Dubai has created a special management unit called Virtual Asset Administration (VARA) to monitor crypto-related businesses there.
The UAE now joins India, China, the United Kingdom, Turkey and Kazakhstan, among others, who have already begun creating their respective CBDCs.