UAE Central Bank Launches Digital Dirham

UAE Central Bank Launches Digital Dirham

The Central Bank of the United Arab Emirates (CBUAE) has launched a strategy to introduce the digital dirham, a new form of national currency (Central Bank Digital Currency, CBDC). The project is part of the state Financial Infrastructure Transformation Program (FIT program), aimed at accelerating the digitalization of the financial services sector.

To implement the project, the regulator involved the digital infrastructure provider G42 Cloud and the fintech company R3.

The first stage of the strategy, which is expected to be completed within the next 12-15 months, includes three areas: the launch of the mBridge payment blockchain bridge for international transactions using CBDC, the development of a payment bridge system for settlements in digital national currencies with India, and a trial release of a digital dirham for testing in wholesale and retail trade in the UAE.

On March 15, it became known that the central banks of the UAE and India signed a memorandum of understanding regarding the use of digital national currencies for cross-border payments.

The Reserve Bank of India (RBI) is also currently piloting CBDCs. Testing in the retail segment began in December 2022 and is already underway in at least 15 Indian cities.

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