UAE to experiment and launch an in-house digital currency

The United Arab Emirates becomes the latest country to join the race for experimenting with an in-house digital currency. According to the three-year plan for 2023-2026 that announces the launch of its digital currency, the Central Bank of the UAE, or CBUAE, intends to stand among the top 10 central banks across the world.

CBUAE’s strategy involves seven objectives to help drive the country’s digital transformation ambitions, primarily focused on financial services. Gulf News reported that this transformation will be heavily dictated by the latest iterations of artificial intelligence and big data solutions. 

While UAE’s innovation strategy is aimed at streamlining “inspection, monitoring and insurance systems” through technology, the government will involve the use of the UAE Pass, a digital identity system for keeping track of citizens “to bolster financial inclusion and easy access to financial services.”

Staying in line with its goal of global fintech disruption and the Green Economy initiative from Vision 2021, the UAE government envisions developing a secure cloud infrastructure for consistent innovation. Gulf News also reported on the launch of a survey carried out by CBUAE named “Future Expectations and Needs of Partners Survey,” which has been scheduled for July 15, 2021.

While numerous Gulf countries have previously signaled their readiness to experiment with digital technologies, the UAE becomes the first regulator to announce interest with a fixed timeline. 

Related: Report: Vietnam's PM asks State Bank to trial digital currency on the blockchain

As cryptocurrency continues to gain the trust of the general public, governments have become more attentive to developments around the use of blockchain and digitization within their existing financial systems.

Earlier this month, the Vietnamese prime minister Phạm Minh Chính shared his interest in trialing a digital currency “as part of his wider e-government development strategy.” On the contrary to this development, the Vietnamese government had previously banned the use of Bitcoin (BTC) for payment. However, citizens are still allowed to privately invest in BTC without expecting any regulatory scrutiny.

With Bitcoin’s presence in mainstream finance getting stronger by the day, governments across the globe are reevaluating the use case for Bitcoin and its direct implication on the shift of political power.