In a bid to control the surge of unregulated cryptocurrencies, the Central Bank of the United Arab Emirates (CBUAE) has announced to launch its own digital currency by 2026.
The decision in part central bank’s 2023 to 2026 strategy which it says ‘seeks to position it among the world’s top 10 central banks,’ reported a Dubai-based media outlet.
The CBUAE said that its strategy comprises seven objectives, including the issuance of the digital currency – known as CBDCs or Govcoins – and driving digital transformation in the UAE’s financial services sector by utilising the latest artificial intelligence and big data solutions.
The strategy will also see technology used across inspection, monitoring and insurance systems, in addition to utilising the UAE’s digital ID infrastructure (UAE Pass) to bolster financial inclusion and easy access to financial services.
“Besides seeking to develop advanced and secure cloud infrastructure to operate financial and insurance services, the strategy aims to support the UAE’s green economy efforts and continue work to develop more innovative financial infrastructure to boost the UAE’s competitiveness in this field,” said the statement.
“CBDCs (central bank digital currencies) offer the opportunity to start with a ‘clean slate.’ It is crucially important that central banks take the cross-border dimension into account,” Jon Cunliffe, chair of the Committee on Payments and Market Infrastructures and deputy governor for Financial Stability of the Bank of England, said in a report prepared for the G20 meeting in Italy.
The CBUAE has already taken several measures to create a digital currency in February 2021.
The UAE regulator and the Digital Currency Institute (DCI) of the People’s Bank of China (PBC) have joined a central bank digital currency project for cross-border foreign currency payments, Khaleej Times reported.
In March this year, China started a test phase of its digital yuan.
The central banks of the United States, the European Union and England are also considering the launch of their own digital currencies.
Created in 2008 as an alternative to traditional currencies, bitcoin is the world’s most popular virtual unit.