On Feb. 12, 2023, the Central Bank of the United Arab Emirates (CBUAE) announced the launch of a new initiative called the “Financial Infrastructure Transformation Program,” which has nine key objectives. One of these objectives is the research and development of a central bank digital currency (CBDC) designed to address both cross-border payments and domestic use cases.
United Arab Emirates CBDC Initiative to Address Inefficiencies in Cross-Border Payments and Drive Domestic Innovation
The Central Bank of the United Arab Emirates (CBUAE) aims to bolster the region’s financial infrastructure with a new program, the “Financial Infrastructure Transformation Program” (FIT), which includes nine key initiatives. The FIT aligns with the CBUAE’s mission to “enhance monetary and financial stability” through a “robust financial infrastructure” and the adoption of digital technologies.
The nine initiatives included in the Financial Infrastructure Transformation Program (FIT) include: a domestic card scheme, eKYC, a central bank digital currency (CBDC), open finance, supervisory technology, an innovation hub, an instant payments platform, a financial cloud, and enhancing customer experience. The CBDC is designed for both cross-border payments and domestic use, with the goal of addressing inefficiencies in cross-border payments and promoting innovation in domestic payments. Full integration of the FIT program is planned for 2026.
“The FIT programme embodies the directions and aspirations of our wise leadership towards digitizing the economy and developing the financial sector. We are proud to be building an infrastructure that will support a thriving UAE financial ecosystem and its future growth,” H.E. Khaled Mohamed Balama, the governor of the CBUAE said in a statement. “We will work with our partners to implement the programme, achieve its goals, accelerate the adoption of digital services in the financial sector, and attract the best talent.”
The Financial Infrastructure Transformation Program (FIT) is in line with the vision of H.H. Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of the Presidential Court, and Chairman of the Central Bank of the UAE’s (CBUAE) Board of Directors. The CBUAE has stated that implementation updates will be provided after each initiative is completed. The goal is to “enhance the UAE’s competitiveness” as a world leader in financial and digital payments. The UAE’s FIT program and CBDC initiative follow the recent CBDC pilot experiment by the Saudi Arabian Monetary Authority (SAMA).
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Jamie Redman
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