- United Arab Emirates set to put financial infrastructure transformation plans in motion.
- UAE launches digital currency in line with FIT plans
- Here’s how the new development could transform the financial sector of the UAE.
The United Arab Emirates is in talks to launch its own central bank digital currency (CBDC) in place of its newly formed financial infrastructure transformation program that was just found.
Recently, the central bank of the UAE introduced the program and listed all the advantages it would have for supporting the country’s financial services sector. They also pointed out that the program would promote digital transactions in the United Arab Emirates.
Another resourceful part of the digital currency would be its ability to enable the United Arab Emirates’ competitiveness as a digital payment hub and a well-structured financial hub.
The first phase of the Financial infrastructure transformation for the UAE is the issuance of the CBDC. According to the central bank, digital currency would help address cross-border payments problems and inefficiency and support innovations for domestic prices. The Financial infrastructure transformation will go a long way in helping the UAE thrive financially in a healthy ecosystem.
The United Arab Emirates government is also planning to launch other projects in addition to the digital currency, including the launch of a unified card payment platform to facilitate the development of e-commerce and also to help the growth of an instant payment platform to support financial inclusion, while aiding the growth of a cashless society during the first state of the economic infrastructure transformation (FIT) program.
It was also reported that the financial infrastructure transformation program has nine initiatives, including the ones that would be launched within the first phase, also known as an e-Know your Customers Initiative and an innovation hub.
This development is in contrast to the new virtual asset regulatory laws that were recently released by Dubai’s virtual asset regulatory authority, which included a comprehensive guideline on virtual asset activities for projects that are currently operating within the emirates and a law that banned issuing anonymity-enhanced cryptocurrencies which are also popularly known as privacy coins.
The new law was already enforced by January 14, with expectations of it requiring crypto entrepreneurs currently operating in the UAE to cooperate. Web 3 and crypto projects in the UAE would have to figure out a way to comply with the new federal law and all of their country’s other existing laws on cryptocurrency to avoid getting fined for refusal to comply.
Conclusion
The United Arab Emirates government expects that despite the minimum requirements attached to the Virtual Asset Service Providers being attainable, some crypto firms would still have a difficult time navigating the new laws, which is, in a way, to the advantage of the government as they would be able to weed out the problematic firms in the UAE crypto space.
