UAE’s ‘Digital Dirham’ to Disrupt International Trade Settlements
The United Arab Emirates' (UAE) central bank has recently introduced a new plan for issuing its digital currency, known as the 'digital dirham.'
This deployment is part of the country’s Financial Infrastructure Transformation (FIT) Program, which consists of nine key initiatives.
Over the next 12 to 15 months, the initial phase of the strategy will be implemented, which comprises three components
- Soft launch of mBridge, enabling real-value cross-border CBDC transactions for international trade settlements
- Proof-of-Concept (PoC) for CBDC bridges with India
- PoC for domestic CBDCs in wholesale and retail.
The introduction of CBDCs in the United States has raised concerns about financial privacy, with Congressman Tom Emmer introducing the CBDC Anti-Surveillance Act to block the Federal Reserve from launching the Digital Dollar Project.
The digital euro enrollment of the European Central Bank (ECB) is currently prioritizing e-commerce and person-to-person payments.
At the same time, the Bank for International Settlements (BIS) has recently concluded its ‘Icebreaker’ project, which examines the potential benefits and difficulties associated with utilizing CBDCs in international payments.