The Central Bank of the UAE has signed an agreement with G42 Cloud and R3 to launch the central bank’s digital currency strategy, one of nine initiatives under the UAE’s Financial Infrastructure Transformation Program. “G42 Cloud” was selected to provide infrastructure services for the project and “R3” to provide technology services.
This partnership follows on from the success of the central bank’s digital currency initiatives, including a “transition” project with the central bank of Saudi Arabia in 2020, the results of which confirmed the feasibility of using a digital currency issued by the two banks. Make cross-border payments. The project also won the “Global Impact 2021” award from “Central Banking” magazine. In addition to the cross-border central bank digital currency project “Bridge” in cooperation with the trial operation. The Hong Kong Monetary Authority, Bank of Thailand, People’s Bank of China Institute of Digital Currency and Bank for International Settlements in 2022, through which transactions with real financial value were completed. Your Digital Currency Strategy.
The first phase of the central bank’s digital currency strategy, which is expected to be completed in the next 12 to 15 months, includes three main pillars: the pilot launch of a bridge platform to facilitate cross-border digital currency financial transactions and international market settlement. of commercial payments and bilateral cooperation in India’s proof of concept for centralized digital currencies with the Republic, which is the largest trading partner of the UAE, as well as approving the concept of digital currency for central banks. Issue a digital currency for use by individuals, businesses and institutions in the UAE.
Issued and backed by a central bank, CBDC is a risk-free form of digital money and a store of value, with the benefit of being a safer, faster and cheaper way to make international payments. As part of the UAE’s efforts to transform itself into a digital economy, the Central Bank Digital Currency will help alleviate current local and cross-border payment challenges, achieve financial inclusion and access to a cashless society, and help empower. payment infrastructure in the UAE and provides additional robust channels for local and international payments, ensuring a flexible and reliable financial system. In addition, the central bank is working on preparing the UAE to integrate the payment infrastructure with digital encryption (tokenization), which includes the encryption of financial and non-financial activities.
His Excellency Khaled Mohammed Balama, Governor of the Central Bank, said: “The central banks’ digital currency initiative forms part of a financial infrastructure transformation program that will strengthen the UAE’s leading position as a global financial hub.” His Excellency added: “The launch of the Central Bank’s Digital Currency Strategy will represent the development of the country’s monetary and payments system, as its implementation aims to accelerate the pace of transformation to a digital economy and increase financial inclusion. We look forward to seeing the opportunities that central bank digital currency will bring to our economy and society.”
Source: Al Ittihad
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