The United Arab Emirates will soon launch its central bank digital currency. The announcement comes from the Ministry of Finances which praises the contribution of digital technologies such as AI, Big data and blockchain to the development of innovative financial services in the country.
The Dirham digital arrives in UAE
In a bid to support the transition to a digital economy and overshadow private cryptocurrencies, several countries around the world are developing central bank digital currencies. A hub of technological innovation in recent years, the United Arab Emirates is not to be outdone. Indeed, the Ministry of Finance of the United Arab Emirates has announced the imminent launch of a CBDC in the country. This announcement comes almost 10 months after the conclusive test of a cross-border CBDC transaction.
The United Arab Emirates has launched its digital currency strategy and the digital dirham is on its way.
UAE Ministry of Finance
Beyond the Digital Dirham, the Ministry of Finance is touting digital technologies as a vector for economic development. According to the Ministry, AI, Big Data and blockchain play an important role in optimizing investments and redefining payments.
The forthcoming launch of a digital Dirham confirms the ambition of the UAE to be at the forefront of the digital economy. However, given the characteristics of the CBDC, it is to be feared that the expected results will not be forthcoming. Indeed, the CBDC’s centralized nature means that it could easily be used as a tool of repression. The fact that it is backed by the national currency also exposes it to loss of value and inflation. All these risks are avoidable with a resilient private cryptocurrency like Bitcoin. El Salvador is a good example.
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