The Central Bank of the United Arab Emirates (CBD) has issued a new report that details a roadmap to introduce a national digital currency. According to the report, the CBDC will be issued by the government and will be supported by a number of government agencies including the Central Bank, Ministry of Finance and Ministry of Economy.
The Central Bank of the United Arab Emirates (CBEU) is planning to launch the first government-backed digital currency. This will be rolled out by the end of 2018 and would compete with central bank issued digital currencies like the United States’ Federal Reserve’s BTS reserve system and the Japanese Central Bank’s J-Coin. CBEU would issue its own currency, which could be used by both consumers and businesses. The CBE has not yet announced details of the digital currency, such as the name, design, or how it will be used or accepted.TL;DR Breakdown
- UAE Central Bank leads the crypto ecosystem for border payments.
- The World Bank considers accepting digital currency as a legal means of payment.
UAE Central Bank seeks to join the digital currency market by creating its token as a trading strategy. The key to the project is for the financial institution to go digital by adopting new crypto technologies. This includes developing a robust and secure cloud scheme for citizens.
The chair of the Committee on Payments and Market Infrastructures said the digital currency provides an opportunity to start a new economy. Both companies and investors have the desire to use a renewed market without high payment fees.
UAE Central Bank enters the crypto market
UAE Central Bank committee has strengthened its ties to have a digital currency since the beginning of the year. Even the country’s regulators and the digital currency organization have shown their support for this new ecosystem. The goal is for crypto to serve as a means of payment at the country’s borders.
Three entire organizations in Dubai, Hong Kong, and Thailand are in this project, reaching their approval. In the crypto development of the country, Blockchain technologies will also be navigated but using their ecosystem. It will attempt to support the majority of crypto transactions on the day for the entire week.
Weeks ago, the banking authorities showed their support for the border payments promoted by the UAE Central Bank. They praised the system, saying this will benefit both the country and the partners.
Digital currency adoption will improve transfers
The financial institutions associated with the project to include a digital currency in Dubai indicate how this move will alter the economy. Slow and high-cost transactions will remain in the past as indicated by the central authorities. The banking organizations’ cryptocurrencies show enormous potential over the speculative decentralized currencies.
The S&P Global Ratings CEO suggests that cryptocurrencies are volatile, but a digital currency maintains its value. In addition, he clarifies that a virtual dollar will maintain its price, it only changes the way it is negotiated, and the transaction fees will below.
Even the World Bank vice president indicates that cross-border payments may be reactivated with significant crypto. As transactions are cheaper, faster, and safer, companies may be encouraged to make this payment type. But this transaction will also help the economy in the country and the UAE inhabitants.
Over 90 percent of banking authorities think about creating their central token, according to collected figures. However, there are doubts about how they will be used, whether the commissions are appropriate, or under which central organization they will be governed.
Speculation indicates that central crypto will perform the same as decentralized cryptocurrencies but their volatility. A perfect example would be USDT linked to the US dollar price, and its value does not move from there. The only difference in this central crypto reintegration project plan is making legal payments with the token.
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