The Central Bank of the United Arab Emirates (UAE) decided to issue CBDC as a priority to boost the cashless economic region in UAE.
In the last few years, UAE’s Emirates has shown a significant Inclination toward the Crypto sector. Almost all of the Emirates are trying to bring new opportunities for the Crypto companies to set up their business & push digital innovations in the UAE. In March 2022, Dubai government agencies established the crypto regulatory body “VARA” to regulate the crypto companies & prohibit illegal activities linked with cryptocurrencies.
Recently the Central Bank of the United Arab Emirates (CBUAE) announced that the Bank is planning to launch the Central Bank Digital Currency (CBDC) in UAE as a part to make UAE a hub of digital innovations.
This latest CBDC development plan is a part of the financial infrastructure transformation (FIT) program, launched last Sunday. Under the FIT program, UAE aimed to support the local sector through better financial & digital innovation.
CBUAE said that initial issuance of CBDC will be for use in domestic & cross border payments and CBDC-based payment system will mainly focus on solving the problems associated with traditional systems like inefficiency in cross border payments.
“(CBDC will) address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments, respectively,” CBUAE said.
Alongside the CBDC payment system, CBUAE is also planning to explore ways to introduce a unified card payment platform to push the cashless payment sector’s growth.
VARA against illegal Crypto activities
Last week, Dubai crypto space regulatory body VARA released several new guidelines to impose new restrictions on the crypto companies to prohibit the illegal activities associated with cryptocurrencies.
In particular, VARA ordered all the crypto companies to not issue privacy coins and also to follow all safety guidelines before any advertisement of crypto service.