Central Bank of UAE Plans to Introduce Digital Currency Through Financial Transformation Initiative
The Central Bank of the United Arab Emirates (CBUAE) has unveiled the Financial Infrastructure Transformation (FIT) program, a comprehensive initiative aimed at accelerating the digital transformation of the financial services sector in the UAE.
The FIT program, which is scheduled for completion in 2026, aligns with the "We the UAE 2031" vision and National Digital Economy Strategy. The program consists of nine total initiatives, one of which is the launch of a central bank digital currency (CBDC).
H.E. Khaled Mohamed Balama, Governor of the CBUAE, stated that the FIT Programme aligns with the leadership's vision of digitizing the economy and developing the financial sector. The CBDC, which is expected to launch in 2025, will be used for both domestic and international transactions.
The first stage of the FIT program includes the introduction of a Card Domestic Scheme, an Instant Payments Platform, and the issuance of CBDC for domestic and international use. These newly developed digital infrastructures aim to raise security and operational resilience, increase innovation and customer experience, save operating costs, and improve regulatory compliance.
In addition to the CBDC, the digital payment initiatives in the FIT program are expected to drive financial inclusion, promote payment innovation, enhance security, and contribute to a cashless society. The digital payment initiatives are designed to promote efficiency in the financial services sector.
The CBUAE will strengthen its digital leadership as part of the FIT Programme by using supervisory technologies and data management solutions. The FIT Programme is also intended to support a thriving UAE financial ecosystem and its future growth.
As part of the FIT Programme, the CBUAE aims to undertake effective supervisory procedures and guarantee financial stability. The FIT Programme's goals include improving monetary and financial stability, as well as consumer protection through a strong financial system and digital technology.
The next phase of the FIT Programme involves developing digital infrastructures such as the Financial Cloud, eKYC, and Open Finance Platforms. The CBUAE aims to use these digital infrastructures to further promote efficiency in the financial services sector and enhance the UAE's competitiveness as a financial and digital payment hub.
Overall, the FIT Programme is a significant step forward in the digital transformation of the UAE's financial services sector. By leveraging digital technology and innovation, the CBUAE aims to create a more secure, efficient, and inclusive financial ecosystem for the benefit of all UAE residents and businesses.
