UAE Minister of State sees wide adoption of CBDC for payments

The UAE Minister of State and chairman of the Abu Dhabi Global Market, Ahmed Ali Al Sayegh believes that Central Bank Digital Currencies have a strong role to play in payments and cashless economies including domectic ones. He said, " In recent years, various digital currencies were introduced… Among which that could become more widely adopted are the central bank digital currencies,”

These statements were made at At the Future of Finance conference hosted by the UAE Central Bank. According to Minister Al Syegh CBDCs will not only help push the shift towards cashless transactions, it will broaden access to financial services and make cross-border payments and trade flows more efficient. He added, 'The future of finance will see a wider adoption of central bank digital currencies (CBDCs) as a payment mechanism."

In addition he believes that in the UAE CBDCs can drive a cashless economy. He states, “Domestically, CBDCs can help drive a cashless economy and make [fund transfers] more efficient. Globally, CBDCs can support cross-border trade flows and payments. By using central bank money, payments will be faster and safer, taking place in real time.”

The UAE Central Bank has worked on several projects related to CBDC. The lastest project is with Hong Kong Monetary Authority. Previously it worked on a wholesale pilot CBDC project with the Saudi Arabia's Central Bank SAMA.

“We believe that digital currencies serve to broaden access to financial services and allow more efficient and affordable cross-border trades. These benefits can only be obtained once digital currencies have come under regulatory safeguards that are appropriate to their increasingly important role in the global financial system,” said Al Sayegh at the conference.

In addition during the event The Central Bank of the UAE (CBUAE) and Abu Dhabi Global Market (ADGM) signed Memorandum of Understanding (MoU) to collaborate on the development and growth of the UAE’s FinTech ecosystem through joint initiatives and activities.

Commenting on the agreements, Al Sayegh said, "The Fintech sector is fast shaping the face of the global financial system, requiring coordinated attention by regulators to ensure its robust development and integration. ADGM has, since its inception, striven to introduce regulatory frameworks and solutions, as well as partner with leading regulators locally and globally, to create an environment that enables innovation and progressive technology adoption. Our agreement with the Central Bank of the UAE further reinforces this joint commitment to bolstering the UAE’s thriving Fintech sector. We are confident our continued relations with the CBUAE will result in greater regulatory excellence and further opportunities in the Fintech field for international and local talent alike."