The United Arab Emirates expects to complete the first phase of its central bank digital currency strategy around mid-2024, its central bank announced on Thursday. This includes proof-of-concept work for a wholesale and retail CBDC.
The Central Bank of UAE (CBUAE) also revealed an engagement with G42 Cloud, a cloud platform from the region, and New York-based blockchain firm R3 as the infrastructure and technology providers respectively.
The first phase of the CBUAE’s CBDC (The Digital Dirham) is expected to be completed over the next 12 to 15 months and will include three major pillars, the announcement said.
The first pillar is the soft launch of the ongoing project mBridge, a collaboration between the Bank for International Settlements (BIS) and the central banks of Hong Kong, the Chinese mainland, the United Arab Emirates and Thailand to study cross-border payments and multi-CBDC transactions.
The second pillar is proof-of-concept work for a bilateral CBDC bridge with India and the third is proof-of-concept work for a domestic wholesale and retail CBDC, the plans for which were first announced last month.
The UAE had announced its digital dirham as one of nine key initiatives of its new Financial Infrastructure Transformation Program at a time when central banks all over the world have been working towards exploring CBDCs.
Dubai, one of the UAE’s emirates, has also recently published rules to regulate the crypto sector.