Amid the rise of unregulated cryptocurrencies the Central Bank of the United Arab Emirates has announced it is to issue its own digital currency.
The move by the CBUAE is part of its 2023 to 2026 strategy which it says ‘seeks to position it among the world’s top 10 central banks’.
In its announcement, the CBUAE said that its strategy includes seven objectives, including the issuance of the digital currency – known as CBDCs or Govcoins – and driving digital transformation in the UAE’s financial services sector by utilising the latest artificial intelligence and big data solutions.
The strategy will also see technology used across inspection, monitoring and insurance systems, in addition to utilising the UAE’s digital ID infrastructure (UAE Pass) to bolster financial inclusion and easy access to financial services.
The strategy also aims to support the UAE’s green economy efforts as ESG awareness continues to grow in the world, and the CBUAE will focus on developing more innovative financial infrastructure to boost the UAE’s competitiveness.
And the CBUAE is to launch a survey titled ‘Future Expectations and Needs of Partners Survey’, which is scheduled to be conducted on 15th July, 2021, urging its partners to participate.
Writing Central banks, together with their mints and printers, are responsible for the issuance of physical currency. Yet 97 percent of the money in existence is now digital, and most of it – aside from that which was created by Quantitative Easing – was created by banks – HSBC, Barclays et al – when they lend. Hence debt-based fiat money.
The CBUAE will focus on developing more innovative financial infrastructure to boost the UAE’s competitiveness.
Writing in Arabian Business previously, cryptocurrency columnist Dominic Frisby said “Technically, when you deposit money in the bank, you are actually lending it to the bank. Fiat money is, basically, debt.
“CBDCs are slightly different, and they will see central banks creating money more directly in the real economy.
“Individuals will have a wallet with the central bank into which, for example, your UBI or furlough money can be deposited, and from which your taxes can be extracted. Many will start to use the money in their central bank wallet just as they use the money in their bank account.”
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