UAE Central Bank Launches Digital Dirham CBDC

By Kevin • March 23, 2023 11:45 am • Comments

It looks like CBDCs are already becoming a reality in certain parts of the world despite the negative criticism that they have received.

The Central Bank of UAE just announced to the public that they have launched its CBDC strategy which is called “The Digital Dirham”.

This is expected to digitize and transform the financial ecosystem of the country in order to make it a financial and crypto hub.

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Speculators believe that the launch of this CBDC will address multiple problems related to cross-border and domestic payments.

If the launch ends up generating successful results in the next year, it can be believed that the rest of the region will likely follow the same path as the UAE.

Watcher.guru reports:

Elaborating on the same, Khaled Mohamed Balama, the Governor of the CBUAE reportedly said,

“CBDC is one of the initiatives as part of the CBUAE’s FIT programme, which will further position and solidify the UAE as a leading global financial hub. The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country.”
Furthermore, he added,

“CBDC will accelerate our digitalization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.”

According to reports from Gulf News and Arabian Business, the first phase of the strategy encapsulates three major pillars. The first involves the soft launch of “mBridge” to facilitate real-value cross-border CBDC transactions for international trade remittances.

It looks like the next stage of the CBDC experiment is to create CBDC bridges with other countries that also have CBDCs.

This would then result in an international CBDC exchange network which is truly what would drive global adoption.

On the other hand, CBDC debates within the United States continue as Senator Ted Cruz recently blocked the Federal Reserve from issuing a CBDC.

The reason is because of concerns of the possibility that it would violate privacy rights of the users and would limit people’s financial freedom.

There are also arguments that it would destabilize the banking sector which is currently weak as a result of the recent banking crisis.

CoinTelegraph concludes:

Meanwhile, a study released by a division of the U.S. Treasury claimed that integrating a CBDC into the economy would destabilize banks, calling the harm it could cause to banking “significant” in times of stress.

Nigeria, on the other hand, Nigeria is witnessing increased adoption of its eNaira, as paper currency faces severe shortages. The total number of CBDC wallets in Nigeria sits at 13 million, growing more than 12 times compared with October 2022.

As of March, 114 countries, representing over 95% of the global GDP, are exploring CBDCs. 65 nations are already in advanced stages, according to the U.S.-based think tank, the Atlantic Council.

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