UAE central bank to issue CBDC, promote digital asset growth

[Hydrogen]

The Central Bank of the United Arab Emirates (CBUAE) plans to launch a central bank digital currency (CBDC), among other initiatives, as part of efforts to become a financial and digital payment hub.

Fast facts

• The plans are part of the country’s new financial infrastructure transformation (FIT) program launched on Sunday, which aims to support the local financial services sector through a series of initiatives.
• Stage one of the program includes the issuance of a CBDC for cross-border and domestic use, which the CBUAE said would “address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments, respectively.”
• The government is also planning to begin the plans by launching a unified card payment platform to facilitate e-commerce growth and an instant payments platform to grow into a cashless society.
• Initiatives following the first stage in FIT include a digital assets innovation hub and an e-Know Your Customer platform to help crack down on illicit activity within the space.
• The FIT program announcement followed Dubai’s virtual asset regulatory authority releasing new guides on virtual asset activities for projects operating within the emirates last week, which included a ban on issuing “anonymity-enhanced cryptocurrencies,” also known as “privacy coins.”
• Last year, the Crown Prince of Dubai, Sheikh Hamdan bin Mohammed, said the city aims to be one of the top 10 cities globally in the metaverse economy, creating 40,000 virtual jobs and adding US$4 billion to the city’s economy over five years.

https://finance.yahoo.com/news/uae-central-bank-issue-cbdc-110815317.html

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Will 2023 be a year of deployment for CBDCs worldwide?

I think they have a decent approach targeting cross border applications. If they have a trust less design, it will help to reduce cost overhead which would result in a more efficient and cost effective transaction process. Analysts like Peter Zeihan have recently criticized russia for using airplanes full of gold to conduct cross border transactions. The type of CBDC the UAE is deploying could represent a significant improvement in terms of efficiency.

They have also announced they will rollout a unified card payment program. Which would probably be similar to many of the card payment programs recently introduced by crypto and payment apps worldwide.

I'm not certain how deregulated the financial and economic markets of the UAE were prior to this move. Fullbear2222 recently made a thread claiming dubai leans towards being deregulated:

https://bitcointalk.org/index.php?topic=5439130.0

How this could affect the economies of dubai and the UAE, I would be interested to hear of.

[EarnOnVictor]

I will always say it, Bitcoin has opened the eyes of the world, particularly the central banks to the need to tap into the most digital innovation in the financial system. With the look of things, no country wants to be last in this advancement, except those that are sadists to the system due to reasons best known to them. However, in the long run, they will be the ones that will regret it.

What you shared is good news from UAE, but one thing I will still let you know is that the CBDC is mostly not working on blockchain technology and all of them are centralized. While a few have some components with respect to blockchain technology but are still purely centralized.

This is indeed a setback!

[pooya87]

Everyone is trying to jump on the bandwagon of "crypto" these days. They are just as hyped up and stupid as those who jubilantly invested in ICOs back in 2017. lol

I've always said that the way they are centralizing the technology introduced by Bitcoin is not going to work and soon the problems will start showing up. The existing centralized financial system is good enough and if they want to do anything they should try to improve that. There is no need to create a token for it in platforms they try to build from scratch which is also not tested before!

The only good thing that may come out of these govcoins is the death of stablecoins. Fingers crossed

[Outhue]

@Pooya87, you made a good point by saying that CBDC will be the death of stable coins but what about decentralized stable coins like DAI? Can SEC hunt them down too?

I will never be a part of those that will start using CBDC to Bitcoin pair or other, it looks like a success already for the government, they have finally taken over.

Truth be told, I was not expecting this very soon.

[avikz]

Good for UAE and its government. Bad for people who enjoys the accumulation of wealth in this zero tax country. Now everything will be seen by the government and financial privacy will become a thing of past in UAE.

In 2023, multiple other countries will implement this CBDC infrastructure. For rich countries like UAE, it might not become a problem. But for poorer nations, it will be used as a tool for force taxation. Mark my word!

[DaveF]

...now everything will be seen by the government and financial privacy will become a thing of past in UAE....

It's that the point? Not to be cynical about it but this goes back 50+ years when the US pulled the $500 & $1000 and $5000 bill when they were pulled from circulation for fear of 'criminal money laundering'
Every year more and more places come up with more and more regulations and more and more ways to follow the money.

I'm sure as more and more countries come out with their CBDC we will start to see more and more ways of taxing transactions that used to fly under the radar.

-Dave

[pooya87]

@Pooya87, you made a good point by saying that CBDC will be the death of stable coins but what about decentralized stable coins like DAI? Can SEC hunt them down too?

If there is any truly decentralized cryptocurrency including stablecoins, they shouldn't be affected by anything centralized (ie. CBDC). But the problem with stablecoins is that they always have some degree of centralization, DAI is not an exclusion even if that degree is low for it.

[Flexystar]

Reminds me about the CBDC and SEC fight where they are trying to control the crypto currencies and want them to be under their watch. It does not matter you trade cetrally or decentralized one. The FAST FACT is, if they go world wide then they will have plot to destroy the whole crypto based projects, exchangers, assets based on them and what not.

They will just start controlling it and if they get such global access then we are done! Anyways, every nation already has that government based authority which can make this happen. But CBDC getting involved is like having interpol right at your door step watching every move that we make. 

@Pooya87, you made a good point by saying that CBDC will be the death of stable coins but what about decentralized stable coins like DAI? Can SEC hunt them down too?

If there is any truly decentralized cryptocurrency including stablecoins, they shouldn't be affected by anything centralized (ie. CBDC). But the problem with stablecoins is that they always have some degree of centralization, DAI is not an exclusion even if that degree is low for it.

Ah, boys I dont think we are understanding the facts clearly here. If they become prominent everywhere then crypto would be treated as illegal stuff. It would be similar to smuggling drugs and exchanging the crypto's. I think having stablecoins or decentralized stuff would not matter if they ordered the shut down of same.

What do you call something which is decentralized but having a watch over by the government authority? Makes sense isnt it?

[bittraffic]

Reminds me about the CBDC and SEC fight where they are trying to control the crypto currencies and want them to be under their watch. It does not matter you trade cetrally or decentralized one. The FAST FACT is, if they go world wide then they will have plot to destroy the whole crypto based projects, exchangers, assets based on them and what not.

They will just start controlling it and if they get such global access then we are done! Anyways, every nation already has that government based authority which can make this happen. But CBDC getting involved is like having interpol right at your door step watching every move that we make. 

@Pooya87, you made a good point by saying that CBDC will be the death of stable coins but what about decentralized stable coins like DAI? Can SEC hunt them down too?

If there is any truly decentralized cryptocurrency including stablecoins, they shouldn't be affected by anything centralized (ie. CBDC). But the problem with stablecoins is that they always have some degree of centralization, DAI is not an exclusion even if that degree is low for it.

Ah, boys I dont think we are understanding the facts clearly here. If they become prominent everywhere then crypto would be treated as illegal stuff. It would be similar to smuggling drugs and exchanging the crypto's. I think having stablecoins or decentralized stuff would not matter if they ordered the shut down of same.

What do you call something which is decentralized but having a watch over by the government authority? Makes sense isnt it?

I don't think they can prevent the adoption of BTC or any other crypto when all other merchants starts accepting cryptocurreny, only two parties are involve. No government nor middle man is involve in the transaction. Are they going to make the whole country of El Salvador criminal?

Its CBDC who will adopt BTC. Thats what I see. The digital govcoins will be on exchanges and on the government app along with BTC.

[Argoo]

I will always say it, Bitcoin has opened the eyes of the world, particularly the central banks to the need to tap into the most digital innovation in the financial system. With the look of things, no country wants to be last in this advancement, except those that are sadists to the system due to reasons best known to them. However, in the long run, they will be the ones that will regret it.

What you shared is good news from UAE, but one thing I will still let you know is that the CBDC is mostly not working on blockchain technology and all of them are centralized. While a few have some components with respect to blockchain technology but are still purely centralized.

This is indeed a setback!

In 2023, the Central Banks of many countries began to actively consider the possibility of launching their own CBDC to improve the payment and banking sectors.
The release of a virtual version of the dirham will solve the problems and inefficiencies of cross-border payments, because the current international payment system SWIFT has become very slow and inefficient. In addition to CBDC, the UAE government also plans to launch a single card payment platform to promote the growth of e-commerce and an instant payment platform. It appears that these CBDCs will operate using blockchain technology.
In any case, the issuance of their own CBDC by states significantly increases the efficiency of their banking system. What impact CBDC will have on the cryptocurrency and current stablecoins, time will tell.