The first phase of the strategy, which is expected to take place over the next 12 to 15 months, comprises three primary pillars. These include initiating real-value cross-border CBDC transactions for international trade settlement, proof-of-concept work for bilateral CBDC bridges with India, and finally, proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.

For Phase 1 of the project, R3 and G42 Cloud have been selected as the technology and infrastructure providers, while Clifford Chance has been called on to provide legal oversight.

The UAE central bank has been involved in a number of international digital currency trials over the past few year, including Project Aber with the Saudi Central Bank in 2020 – which confirmed the possibility of using a digital currency issued by two central banks to settle cross borders payments – and the first real-value cross-border CBDC pilot under the mBridge Project with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Bank for International Settlements in 2022.

H.E. Khaled Mohamed Balama, the governor of the CBUAE, says: “The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalisation journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.”