The UAE hopes to lead the way into a bold new world of central bank digital currencies (CBDCs). The country’s central bank announced its intention to become one of the world’s top 10 banks in a newly released roadmap, and it believes a CBDC will play a crucial part in achieving this lofty goal.
The United Arab Emirates has solidified its status as the Middle East’s top innovation hub. Dubai, the country’s largest city, has grown into a global economic powerhouse that draws major multinational corporations. According to Gulf News, the government is attempting to move its leadership to an international level, and a CBDC could be crucial for the oil-rich country.
The Central Bank of the UAE (CBUAE) has highlighted seven areas of concentration in its 2023-2026 roadmap as it strives to join the United States, China, Japan, and Germany at the top of global banking.
Artificial intelligence and big data solutions in payments and insurance are examples of these topics. These will be linked to the country’s digital ID (DID) system, allowing for seamless interconnected payments. The DID, also known as the UAE PASS, will instantly enable individuals to access various government services. In addition, when climate change is a significant concern around the world, the UAE is attempting to develop a “green economy.”
All of these improvements will be linked via a CBDC-based financial system.
The CBUAE is no stranger to CBDCs, collaborating on one with Thailand, Hong Kong, and China for several months. The UAE and China joined Project Inthanon-LionRock this year, according to CoinGeek, but Hong Kong and Thailand had been working on it since 2019.
The four countries seek to pave the way for other Asian central banks to investigate DLT and CBDCs. Accordingly, their collaboration has been concentrated on international trade settlement, capital market transactions, and cross-border financial transfers.
Aside from its CBDC concentration, the UAE has established itself as a critical player in the blockchain industry. Dubai, in particular, has become a hotbed of blockchain technology innovation. In the recent BSV Stories series, CoinGeek’s Claire Celdran examined Dubai’s emerging significance in the industry, including the government’s efforts to promote the technology.
A new Bitcoin SV Hub will open in Dubai, fostering development and innovation in the Middle East’s blockchain sector.
Jimmy Nguyen, the founder of the Bitcoin Association, praised the UAE’s importance in the development of blockchain technology: