(Kitco News) - The Central Bank of the United Arab Emirates (CBUAE) announced on Sunday that it had launched its new Financial Infrastructure Transformation (FIT) program, which includes plans for the region to issue its own central bank digital currency (CBDC) for cross-border and domestic uses.
According to the press release from the CBUAE, the new FIT program is intended to “accelerate the digital transformation in the financial services sector as part of a wider strategy aimed at enabling the CBUAE to be among the top central banks globally.”
The program has been designed to support the UAEs financial services sector, promote digital transactions, and enhance the region's competitiveness to help it become a financial and digital hub where companies from around the world can collaborate to bring digital transformation to the financial sector, the CBUAE said.
Along with the creation of a CBDC, there are a total of nine initiatives included in the program. The first stage revolves around digital payment infrastructures and services, including the launch of a domestic card scheme, an instant payments platform, and the issuance of a CBDC for cross-border and domestic uses.
“These digital payment initiatives will drive financial inclusion, promote payment innovation, security and efficiency, and achieve a cashless society,” the announcement said.
To help the program operate smoothly, the CBUAE plans on bolstering its digital leadership by adopting advanced supervisory technologies and data management solutions, which will allow it to implement robust supervisory processes and ensure financial stability.
The second stage involves the development and implementation of a variety of digital infrastructures, “including the establishment of Financial Cloud, eKYC and Open Finance Platforms,” the CBUAE said. “These digital infrastructures will improve regulatory compliance, reduce cost of operation, enhance innovation and customer experience, and most importantly, strengthen their security and operational resilience.”
The FIT program – which was created as part of the country’s “We the UAE 2031” vision and National Digitral Economy Strategy – is planned to be fully integrated into the UAE's financial ecosystem by 2026. The program will help the CBUAE accomplish its mission of “enhancing monetary and financial stability and consumer protection through robust financial infrastructure and the adoption of digital technologies.”
“The FIT Programme embodies the directions and aspirations of our wise leadership towards digitizing the economy and developing the financial sector,” said H.E. Khaled Mohamed Balama, Governor of the CBUAE. “We are proud to be building an infrastructure that will support a thriving UAE financial ecosystem and its future growth.”
Additional details about the other initiatives included in the program and implementation updates will be provided by the CBUAE over time.
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Crypto-related activity in the middle east has been on the rise as of late. Last week, the emirate of Dubai’s Virtual Asset Regulatory Authority (VARA) published its comprehensive rules to regulate the crypto sector, which included the establishment of a licensing regime for crypto companies and a proposal to prohibit the issuance and activities related to anonymity-enhancing crypto, also known as privacy coins.
The regulations set out a comprehensive Virtual Asset Framework built on principles of economic sustainability and cross-border financial security. Under the regulations, all crypto firms wishing to operate in Dubai must first obtain authorization and the relevant licenses.
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