A significant industrial partnership that will strengthen the Central Bank of the United Arab Emirates (CBUAE) Central Bank Digital Currency (CBDC) policy has been revealed. The cooperation with global technology supplier G42 Cloud is a key component of the collaboration, which marks a crucial step toward the establishment of a CBDC in the area.
The latest report from the Arab world that the UAE’s Financial Infrastructure Transformation (FIT), Plan a larger endeavor by the CBUAE that involves nine programs targeted at updating the nation’s financial infrastructure, is ready to incorporate the CBDC strategy. The CBDC strategy lays forth a plan for implementing CBDC in a variety of domestic and international use cases in the region.
Three main pillars make up the first phase of the CBDC plan, which is anticipated to last for the next twelve to fifteen months. These pillars include creating the CBDC’s necessary technological infrastructure, researching the viability of various CBDC use cases, and interacting with stakeholders to win their support and input.
The Relationship, Insight, Workings, And The Structure CBUAE CBDC Strategy
It is said that the relationship between the CBUAE and G42 Cloud will be vital to putting the CBDC strategy into practice. Global technology company G42 Cloud focuses on cloud computing and artificial intelligence. The report confirms that as part of the partnership, G42 Cloud will cooperate with the CBUAE to create the technology infrastructure needed for the CBDC, including a scalable and safe platform for the CBDC’s issuance and distribution.
While addressing journalists, the CEO of G42 Cloud, Talal Al Kaissi, expressed his enthusiasm for the partnership and said that because of its ties to the United Arab Emirates, G42 Cloud has “actually seen that the country is quickly expanding prominence as a worldwide financial powerhouse.”
He continued by saying that the synergy with the CBUAE is a chance to “assist in defining the financial landscape of the UAE and beyond.” It was further revealed that the financial system in the area may significantly profit from the CBUAE’s CBDC policy.
CBDCs, which are issued and backed by central banks, are digital analogs of conventional currencies. CBDCs are not decentralized like other cryptocurrencies like Bitcoin and are governed by the same laws and authorities as conventional currencies.
Many industry professionals contacted agreed that the ability to use CBDCs to simplify payment procedures and lower the expense and complexity of cross-border payments is one of its main benefits. The UAE, a significant center for global trade and finance, may benefit especially from this. CBDCs could help to promote financial inclusion in addition to streamlining payment procedures by giving those who are currently underserved access to digital payment services.
Some Opinions About The Move By CBDC From Different Companies
While commenting on this development, Jack Hardman: a partner, working with Clifford Chance, and also heads the Middle East branch of the fintech, acknowledged the recent development and commended the move by the UAE apex bank. He also said that the most important thing is that the central bank understands the legal implication of the strategy.
His statement was quoted as thus: “It is important that central banks are aware of the legal implications of any preferred structure or strategy,” he said. On the other hand, R3 Chief Executive, David E. Rutter has also reacted to this development, describing the move by the CBUAE as significant.
He said that this is the best time to get the CBDC closer to the mainstream economy especially as it concerns production. The statement reads thus: “this is another significant development that moves the manufacturing and issue of CBDCs even closer.”
Rutter believes that the CBDC can stabilize the financial market in more than one way and make it stronger. Speaking further, he explained that it will facilitate a faster, safer, and more convenient cross-border payments system. He’d rated development as the most progressive aspect of economic development, considering the advantages that come with it.
In a separate interview, Rutter was reported to have said that “we are pleased and delighted that R3 has been chosen to design and implement CBUAE’s CBDC ecosystem in this pioneering drive towards developing a more transparent, trusted, and sustaining digital economy.”