The Central Bank of the UAE (CBUAE) and the People’s Bank of China has signed an MOU (Memorandum of Understanding) to enhance technical and technological cooperation in the development of central bank digital currencies (CBDC), going beyond initial collaboration on mBridge CBDC project.

As per the UAE Central Bank press release, the signings will enhance the strategic partnership between the two friendly nations and expand the bilateral relations in the financial and economic fields.

His Excellency Khaled Mohamed Balama, Governor of CBUAE, and His Excellency Pan Gongsheng, Governor of the People’s Bank of China, signed the MOU in Hong Kong in presence of the UAE Counsel General in Hong Kong, H.E. Shaikh Saoud Ali Almualla.

The CBDC MoU aims to enhance collaboration central bank digital currency development and strengthen cooperation between CBUAE and the Digital Currency Institute of the People’s Bank of China in the field of financial technology. The MoU will enable the exchange of information on best practices and regulations relating to digital currencies and support the implementation of joint initiatives and projects, including the “mBridge” project which is a multi central bank digital currencies platform in facilitating cross-border trade payments instantly and securely.

The MoU also includes cooperation in training and skills development for specialists on both sides and the exchange of bilateral visits to discuss matters of common interest.

Commenting on the signing, H.E Khaled Mohamed Balama, Governor of CBUAE, stated, “We look forward to strengthening cooperation with our partners on innovation and solutions in financial technology including central bank digital currency to support the growth of our economy and society.”

Earlier,according to a Chinese media article, the Bank of China announced during The 3rd “Belt and Road” Summit Forum a list of 369 practical cooperation projects of which was an MOU signed with FAB bank of cooperation in digital currency.

Concurrently Standard Chartered announced its participation in the pilot testing program of China’s central bank digital currency (CBDC) known as the digital Yuan (e-CNY or digital RMB). This move makes Standard Chartered the first foreign bank to engage with the country’s CBDC. According to the announcement, Standard Chartered, in collaboration with City Bank Clearing Services Co, will facilitate e-CNY transactions for its clients. It will allow them to purchase exchange and redeem e-CNY within their bank accounts.

 It is noteworthy that Standard Chartered’s backed digital asset platform, Zodia markets, received an In-Principle Approval (IPA) fulfilling the pre-requisites to receive a Financial Services Permission (FSP) for OTC broker-dealer in virtual assets by Abu Dhabi Global Market (ADGM), Abu Dhabi’s international financial center.

Standard Chartered’s , venture arm SC Ventures, an innovation and fintech investment arm recently partnered with Japanese SBI Holdings to establish a Digital Asset Joint Venture investment company in UAE. The parties intend to capitalize the vehicle with $100 million. The company will invest in DeFi, tokenization, consumer payments and metaverse.

R3 was chosen by UAE Central Bank as its technology partner to design and build a CBDC for the first phase of the central bank’s CBDC project because it is a permissioned based DLT (Distributed Ledger Technology) that decentralize assets privately and works well in regulated industries, but more importantly is its interoperability and asset fluidity. R3 will not only assist UAE’s Central Bank in developing a CBDC but also in tokenizing financial and non-financial activities, in addition to the digitalization of other financial services. 

R3 offers interoperable CBDC solution

LaraontheBlock interviewed R3 to learn more about their role in UAE’s CBDC project.  Alisa DiCaprio, Chief Economist at R3 when asked why R3 was chosen and not another Blockchain technology provider replied, “R3’s Corda is the world’s leading permissioned distributed application platform and is specifically designed to work in highly regulated environments with today’s financial services industry. Corda powers solutions that decentralize assets while maintaining privacy and regulatory oversight, making it a favored technology for central banks looking to issue CBDCs.”

She added, “Its interoperability and asset fluidity means that central banks can move digital currencies openly and freely across network boundaries, using well-defined trusted exchange protocols that meet regulatory demands for privacy and security.” 

This is not the first CBDC project that R3 has participated in. DiCaprio explains, “ R3 has been chosen as the technology partner for numerous CBDC projects, including: Digital Tenge, where the National Bank of Kazakhstan is currently leveraging R3’s Corda for Digital Tenge CBDC project, to test the concept’s feasibility and determine the main parameters of the digital currency model. The Digital Tenge platform recently underwent successful testing with real consumers and merchants in cooperation with market participants. The DT’s entire life cycle (including the programmability and demonstration of the offline transactions chain) was tested.” 

Another project being worked on by R3 is Project Icebreaker, The Bank for International Settlements and the central banks of Israel, Norway and Sweden concluded Project Icebreaker this month, which studied the potential benefits and challenges of using retail CBDCs in international payments. 

According to DiCaprio CBDCs can strengthen financial market infrastructures in several ways. She explains, “CDBCs offer more efficient cross-border payments, faster settlement time periods and the streamlining of multi-party processes, so we’re excited to continue supporting central banks as their respective CBDC journeys.” 

As for why R3 was chosen, one of the most important reasons was the ability to facilitate interoperability and the exchange of data and assets across networks. As per DiCaprio, the platform is exploring ways to act as a bridge to various other platforms outside of the Corda ecosystem. This enables assets to move freely across networks while still maintaining privacy in the decentralization process. 

For Dicaprio interoperability is a critical development and a core focus at R3 to increase reach for users’ assets, minimizing friction with no sacrifice to safety. She adds, “By achieving this, we will be able to connect with other DLT players to provide the most seamless experience for our customers.” 

DiCaprio adds that R3 has seen a growing interest in CBDCs in the region given the region’s rising stature as a global fintech hub. This was appreciated during their partnership with UAE Central Bank. She stated to LaraontheBlock, “We look forward to seeing central banks across the world continue to explore and develop CBDCs and realizing the benefits they can bring to our financial ecosystem.”

R3 readies UAE for Tokenization

The Central Bank of UAE announced on March 23rd 2023 that it had commenced the implementation of its CBDC strategy in partnership with technology entities, UAE based G42 Cloud and Blockchain global solution provider R3. R3 then followed this with its own press release on April 4th 2023 explaining on the UAE Central Bank CBDC project including as well Clifford Chance who will be providing critical legal oversight for the strategy.

R3 in their press release stated that R3’s technological support will enable the Central Bank of UAE to ensure the readiness of the UAE for the potential future tokenization of financial and non-financial activities, in addition to the digitalization of other financial services.

Digitization in UAE

Parties that will be working with the UAE Central Bank CBDC project all agree that the project is part of a wider strategy for digitization in the UAE.

David E. Rutter, CEO at R3, commented, “This is another landmark moment in bringing CBDCs even closer to production and issuance. CBDCs can strengthen our financial market infrastructure in several ways, including more efficient cross-border payments, faster settlement time periods and the streamlining of multi-party processes. The CBUAE has made a significant step forward in realizing these benefits. We are honored and excited that R3 has been selected to design and build CBUAE’s CBDC ecosystem in this innovative move towards building a more open, trusted, and enduring digital economy. We look forward to supporting the CBUAE in the next stage of its CBDC journey.” 

While Talal Al Kaissi, CEO at G42 Cloud, stated, “We’re thrilled to be supporting the CBUAE in the development of its digital dirham. This collaboration represents an important milestone in the digitalization of the UAE’s monetary and payments framework and ensuring that the country remains at the forefront of financial services innovation. As a company founded in the UAE, we have seen first-hand the country’s rapidly advancing status as a global fintech hub and are excited to be working with the CBUAE in leading its digital transformation. We look forward to working with the Central Bank and R3 to deliver a cutting-edge CBDC infrastructure that meets the highest standards of efficiency, security, and innovation.”

While Jack Hardman, Partner at Clifford Chance and Head of Fintech in the Middle East added, “As CBDC development moves from research to real-life building, it is vital that central banks are aware of the legal implications of any chosen design feature or strategy, in addition to how this emerging technology interacts with existing regulations. Clifford Chance has an established track record as a leading advisor in the fields of financial services and technology, and we look forward to working with the CBUAE on its CBDC implementation strategy.”

As per UAE Central Bank, the first phase of the CBDC strategy will be completed within the next 15 months. It will include a soft launch of MBridge to facilitate real value cross border CBDC transactions for international trade settlement, proof-of- concept work for bilateral CBDC bridges with India, one of the UAE’s top trading partners and finally, proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.

The UAE Central Bank views the UAE CBDC as able to address the pain points of domestic and cross-border payments enhance financial inclusion and the move towards a cashless society. It will further strengthen the UAE’s payment infrastructure, providing additional robust payment channels, ensuring a resilient and reliable financial system. More importantly, the CBUAE aims to ensure the readiness of the UAE to integrate the payment infrastructures with the future potential tokenization world, the tokenization of the financial and non-financial activities. 

H.E. Khaled Mohamed Balama, the Governor of the CBUAE, stated at the time, “CBDC is one of the initiatives as part of the CBUAE’s FIT program, which will further position and solidify the UAE as a leading global financial hub. The launch of our CBDC strategy marks a key step in the evolution of money and payments in the country. CBDC will accelerate our digitalization journey and promote financial inclusion. We look forward to exploring the opportunities that CBDC will bring to the wider economy and society.” 

The Central Bank of UAE stated that it was now ready to enter into the next major milestone of its CBDC journey after several successful CBDC initiatives including project Aber with Saudi Central Bank in 2020, and the accomplishment of the first real-value cross-border CBDC pilot under the “mBridge” Project with the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Bank for International Settlements in 2022.

The UAE Central Bank announced on Sunday 12th of February 2023 its nine initiatives for what it calls its financial infrastructure transformation program, the FIT program that will enable the Central Bank of the UAE to be among the top central Banks globally. One of the nine initiatives is the launch of a CBDC for internal and cross border payments, but where is the 10th, the one that will actually put the UAE on the map as the digital payment hub. Where is the UAE’s Central Bank digital asset payment and remittance regulation or rulebook?

So the UAE Central Bank has finally openly stated that it will be launching a CBDC ( Central Bank Digital Currency) for not only cross border payments but also UAE internal national payments. As per the release, the Central Bank Digital Currency (CBDC) would be utilized for cross-border payments and domestic usage in order to address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments respectively.

Ofcourse the announcement that they will launch a CBDC is not surprising given the work the UAE has been doing in the realm of CBDCs over the years. 

In 2019, the Central Bank of the UAE (CBUAE) piloted a wholesale CBDC project with Saudi Central Bank named of “ABER.” A final report was published in 2020, which showed that “the distributed ledger technology would enable central banks to develop payments systems at both local and cross-border levels.”

More recently, the CBUAE, along with the BIS Innovation Hub Hong Kong Centre and the central banks of Hong Kong, Thailand and China,  implemented Project mBridge, a joint initiative experimenting with cross-border payments using a custom-built common platform based on distributed ledger technology (DLT) upon which multiple central banks can issue and exchange their respective central bank digital currencies.

In my previous blog article published on December 15th 2022, I alluded to the fact that the UAE Central Bank could be close to issuing its own CBDC.

At the end of January 2023, the UAE Central Bank and Central Bank of India signed an MOU to collaborate in the payments sector; fintech solutions and experimenting with a CBDC to facilitate cross border transactions.

The Central Bank of UAE as explained in the press release wants to become the financial and digital payment hub and a center of excellence for innovation and digital transformation.

H.E. Khaled Mohamed Balama, Governor of the CBUAE, said: “The FIT Program embodies the directions and aspirations of our wise leadership towards digitizing the economy and developing the financial sector. We are proud to be building an infrastructure that will support a thriving UAE financial ecosystem and its future growth. H.E added: “We will work with our partners to implement the Program, achieve its goals, accelerate the adoption of digital services in the financial sector and attract the best talent.”

The Program comprises implementation of nine key initiatives  mentioned below:



1.  Card Domestic Scheme: The UAE’s first unified, secured, and efficient card payment platform to facilitate the growth of e-commerce and digital transactions in the country.

2.  eKYC:  A  secure  and  user-friendly  platform  to  facilitate  non-face-to-face customer on-boarding and on-going customer due diligence.

3. Central Bank Digital Currency (CBDC): CBDC for both cross-border payments and domestic usage in order to address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments respectively.

4.  Open Finance: Driving innovation and competitiveness as well as collaboration in the financial services sector through inter-connectivity and inter-operability among all players and institutions.

5. Supervisory Technology (SupTech): Advanced SupTech supporting the regulatory and supervisory processes.

6. Innovation Hub: A collaborative platform for engagement, research and development for Fintechs.

7.  Instant Payments Platform: A secure, efficient, and robust payment platform that will support financial inclusion and enable a cashless society through digital payments.

8.  Financial Cloud: A secure, resilient, scalable, and reliable sovereign financial infrastructure.

9. Excellence & Customer Experience: Supporting exceptional customer experiences and fostering a culture of excellence across the financial sector.


But where is the 10th most important initiative? Where is the initiative that actually will allow the UAE to be a digital payments hub? Where is the digital asset payment regulation guideline, the one that VARA in its recent announcement of regulations didn’t cover? Where is the digital asset payments initiative that the UAE Securities and Commodities Authority didn’t cover?

Who will regulate digital asset payments and remittance ecosystem if the Central Bank of UAE doesn’t? It would be hard to imagine the UAE as a hub for digital payments without digital asset payments as well. It will be hard to imagine UAE as a hub for crypto and blockchain companies if there is no regulation governing the crypto, virtual assets payment ecosystem.

Sources close to the matter told LaraontheBlock, ” The nine initiative announced today are only related to the financial infrastructure. There are other initiatives being worked on.” 

I wonder if it is prudent to announce nine initiatives and pass over the one most important initiative that everyone is waiting for. But it seems that the Central Bank are working on other initiatives and hopefully digital assets as a payment method are one of them.

The Saudi Central Bank (SAMA) released a press release where it confirmed that the Central Bank is continuing to experiment on Central Bank Digital Currencies (CBDC).  SAMA is currently working on a project that focuses on domestic or national wholesale CBDC use case in collaboration with local banks and FinTech’s.

Experts explained to LaraontheBlock that this is a CBDC for local wholesale bank settlements. 

This project is part of SAMA’s ongoing research and experimentation on CBDC. SAMA is seeking to research and explore the economic impact, market readiness, and  potential robust and fast applications of a CBDC based payment solution. 

As per the news, SAMA seeks to review policy, legal and regulatory considerations before moving to the next phases of the CBDC journey to contribute to achieving the objectives of Saudi Vision 2030.

H.E. Fahad Almubarak, Governor of SAMA stated “Local banks and payment companies will always be a cornerstone of this project and its implementation, we have engaged both local banks and FinTech’s, as well as other market players and third party consulting and technology providers, to gain a better understanding of CBDC’s functionality and to test various design options.” 

Noted as well, is that SAMA will continue to experiment on CBDC solution as an infrastructure enabler of innovation in financial services that has the potential to contribute to a more resilient payment ecosystem and accelerate digital transformation in the local financial sector.

SAMA stresses that although no decision has been made regarding the introduction of CBDC in the Kingdom, it continues to focus on exploring the benefits and potential risks of implementing CBDC. This will contribute to informed decision-making within SAMA and to CBDC explorations within the central banking community.

Prior to this announcement, SAMA had hired Mohsen Al Zahrani as Head of Virtual assets and CBDC program. This seems to be the first fruit of efforts made. 

In 2020  SAMA successfully conducted CBDC experiment “Project Aber” in 2019, an initiative in collaboration with the Central Bank of the UAE to examine whether distributed ledger technology could contribute to seamless cross-border payments.

During the 2023 World Economic Forum’s session on Financial Institutions innovating under pressure, the Saudi Arabian Minister of Finance Mohammed Al Jadaan states that while CBDCs have privacy issues they are fantastic tool in developing countries.

During the World Economic Forum’s session’ Financial Institutions innovating under pressure’ The Saudi Minister of Finance Mohammed al-Jadaan stated that while CBDCs have privacy issues they are a fantastic tool in developing countries.

While the panel discussed the risks that crypto and new technologies were posing especially given that crypto losses were over $1 trillion in 2022, most agreed that the regulation was a key element in mitigating these risks.

Saudi Finance Minister Al Jadaan also believes that the real risks of these innovations haven’t even been seen yet, and the one incident with the loss of 12 zeros has triggered a lot of thinking of what needs to be done.

He believes that Central Banks, traditional financial institutions and even innovators in Fintech need to discuss how to deal with Anti Money laundering issues, terrorism financing and entities that use these technologies to circumvent the regulatory framework.

When discussing CBDC (Central Bank Digital Currencies) Al Jadaan noted “Whether CBDCs and similar government sponsored currencies one will need to think about privacy.” He believes that the minute a government issues a CBDC or government sponsored cryptocurrency there is a compromise on privacy.

He states, “There is a lot of data to whoever is holding that currency.”

Yet he believes that CBDC is a fantastic tool in developing countries. He explains, “It can be used as a social safety net. CBDC can be used by people to exclusively buy milk, rice, oil but may not be allowed for other items.” He notes that while on one hand it is beneficial the other side of it is the risk of privacy invasion. ‘Bottom line no perfect solution.

Saudi Arabia piloted a CBDC with the UAE under the name ABER. The report on the final project was positive from a technical standpoint and the report highlighted the need for further use case trials.

In addition in July 2022, the Central Bank of KSA hired former Accenture Director Mr. Mohsen Alzahrani to lead the virtual asset and Central Bank Digital currency project at the bank.

It seems KSA is still studying the impact of CBDC implementation and is worried about the issue of privacy infringement.

At the end of 2022 the Prime Minister of Algeria, Aimene Benabderrahmane announced that the Central Bank of Algeria is intending to adopt a national digital currency under the name of “Algerian digital dinar” as part of the digitalization of payments.

In his speech the Prime Minister stated, “One of the main workshops held at the Central Bank of Algeria, was under the theme digital payments that would allow the adoption of a digital form of money. It would ensure that the issuance, management and control of the digital currency, the Algerian digital dinar would be under the Central Bank.”

As reported by the Algeria Press Service these statements were made on the sidelines of the opening ceremony of the Central Banks Future Challenges conference organized by the Bank of Algeria.

“In the digital age, the need to strengthen the security and control of payment systems will undoubtedly be felt, new challenges that the Bank of Algeria must face”, added the Prime Minister.

Algeria has had a rough financial year in 2022. As per the World Bank Inflation remained high—9.4 percent year-on-year during the first nine months of 2022 which notably led by the global rise in food prices (which increased by 13.6 percent in Algeria). Poorer households being the most impacted. The Algerian authorities responded by intensifying measures to protect the purchasing power, primarily by increasing civil service salaries, introducing unemployment benefits for young first-time job seekers, and strengthening subsidies for basic foodstuffs.

Egyptian Central bank has announced that it is currently studying the implementation of CBDC (Central Bank Digital Currency) which should offer a safer and more secure replacement to current cryptocurrencies and the risks associated with them while making use of digital economy.

The Egyptian Central Bank in its 2021 financial stability report stated that it had created an internal and external committee which includes representatives from different Ministerial entities headed by the governor of the Central Bank to study the implementation of CBDCs in Egypt.

It also noted that it is working with external counterparts to study the potential risks and benefits of CBDC implementations. 

Cryptocurrency trading in Egypt is still not regulated and the Central Bank of Egypt has on several occasions mentioned the risk involved in dealing with cryptocurrencies and the fact that it is illegal in the country to do so.

In September, the central bank of Egypt reiterated its warning against dealing in any types of cryptocurrencies, saying that crypto is risky, highly volatile, and is used in financial crimes and e-piracy. At the time the Central Bank of Egypt stated it would fine anyone who violates the Law No 194 of 2020 which prohibits issuing, trading, promoting cryptocurrencies, operating crypto exchanges or any other related activities. The Central Bank will fine violators up to $516,000 ( 10 million LE) or face imprisonment.

The Egyptian central bank had issued a similar warning about cryptocurrencies in January 2018, specifically naming Bitcoin. At that time the Central Bank had noted, “Cryptocurrencies are not backed by any tangible assets and are not supervised by any regulators worldwide, and consequently, they lack the official governmental guarantee and support enjoyed by the other official currencies issued by central banks.”

Yet Egypt has one of the highest crypto usages across Africa and Middle East. In January 2022, TripleA published a report which noted that Morocco topped the Arab countries in terms of crypto ownership, followed by Egypt, then UAE and KSA. The report stated that in 2021 global crypto ownership was estimated at an average of 3.9 percent, 300 million crypto users and 18,000 businesses already accepting crypto payments.

Egyptian national Husayn Hashim, Listing manager of Betconix crypto exchange regulated out of Estonia, states, “The Central Bank of Egypt’s move comes within the framework of the Egyptian government’s efforts to shift to digital payments and achieve financial inclusion. The move is also in line with the growth in the number of Egyptian cryptocurrency traders, as according to the latest estimates, about 1.8% of Egyptians trade cryptocurrencies despite the Egyptian government’s ban on that. I believe that the Egyptian government will soon legally allow the trading of digital currencies after completing the issuance of the legislation regulating this.”

There are 112 countries that are — in one way or another — exploring central bank digital currency (CBDC). Of this number, 11 countries have launched their own CBDCs, 15 are piloting, 26 are developing and 46 are researching. This trend appears to have reached the UAE, with the country’s central bank collaborating with various international agencies.

In 2019, the Central Bank of the UAE (CBUAE) piloted a wholesale CBDC project with Saudi Central Bank named of “ABER.” A final report was published in 2020, which showed that “the distributed ledger technology would enable central banks to develop payments systems at both local and cross-border levels.”

More recently, the CBUAE — along with the BIS Innovation Hub Hong Kong Centre and the central banks of Hong Kong, Thailand and China — implemented Project mBridge, a joint initiative experimenting with cross-border payments using a custom-built common platform based on distributed ledger technology (DLT) upon which multiple central banks can issue and exchange their respective central bank digital currencies.

H.E. Khaled Mohamed Balama, governor of the CBUAE, commented on the mBridge successful pilot by saying, “We will continue to establish the right governance framework for interoperable CBDCs to deliver tangible benefits to UAE companies and consumers.”

The CBUAE and its work on the digital currency could mean that a CBDC may be issued in the near future, but how close in the future is still unknown. The launch of a UAE CBDC will depend on various factors, including the ability of CBDCs to resolve issues of privacy, blockchain interoperability as well as economic monetary concerns.

Will the UAE launch a CBDC?

Stanislav Madorski, the senior vice president of blockchain strategy at WadzPay, told Cointelegraph MENA that given the cost and complexity of executing CBDC pilots, he expects the CBUAE would launch a CBDC.

“UAE has been making strides towards developing a cashless society and is in the top 10 in the world for the most cashless societies with ambitions to be fully cashless within this decade.”

Meanwhile, IBM MENA’s Chief Technology Officer, Anthony Butler, an expert on blockchain and digital assets, saw renewed interest in CBDCs in the region over the last few years, and the mBridge project is reflective of this.

This comes as governments worldwide show renewed interest in launching CBDC projects. In December, Pakistan signed two new laws to expedite the launch of its CBDC. Meanwhile, Spain’s central bank has stated its plans to start a wholesale CBDC project and asked financial institutions and tech providers to submit proposals for the initiative.

Challenges to CBDC launch in UAE

Both Butler and Madorski confirm some challenges that await the CBUAE and other central banks globally in their bid to launch CBDCs.

Madorski sees that while CBDCs have advantages because they are issued by central banks, which have a greater influence on monetary policy and can drive regulatory changes, the biggest challenge will be cross-border acceptance. He explains, “Each country’s blockchain might not be compatible with the other, so interoperability is an issue that we at WadzPay are trying to resolve.” 

Meanwhile, Butler sees much friction in launching retail CBDCs (rCBDCs), most notably the technical and economic challenges. He explains that if CBDCs are to replace cash, they would need to have the privacy that cash experiences offer.

“This is not only relevant within the boundaries of a country but also in cross-border payments,” Butler says. “There was a lot of consideration given in the UAE Saudi ABER CBDC design to this particular point because other countries could have visibility into transactions of counterparties.”

He also notes there are obstacles in moving past the “zero bounds” and toward the introduction of negative interest rates.

In addition, Butler emphasizes there are also structural implications of rCBDCs because if the general public has access to central bank money they no longer need to work with the commercial banking sector.

He emphasizes, “If you replace cash with rCBDC, then there are questions of how to ensure the ability to perform offline payments when someone isn’t connected to the network.”

The future is hybrid

It is plausible that the CBUAE could follow suit and issue stablecoins and a CBDC. Butler believes that several countries are exploring the different aspects of CBDC, like retail and stablecoins. He said these assets have been made available by the commercial banking sector. As he explains, “This will mitigate some of the well-known risks facing CBDCs.”

Madorski confirms that central banks, including Hong Kong, are looking at a hybrid model that would include both stablecoins and CBDCs. He states, “The hybrid model is allowing easy digital currency acquisition both locally and abroad, as stablecoins are readily available on many global exchanges. This model is definitely feasible in the UAE.”

UAE could follow in the footsteps of Singapore and launch something similar to Ubin, which is exploring the use of CBDCs for cross-border currency transactions, the Bank of Japan, which is rolling out a pilot program for its CBDC project to three major Japanese banks in spring 2023, or even India.

But out of the central banks experimenting with CBDCs, the People’s Bank of China leads the race. The Bank will expand the rollout of digital wallets for its e-CNY digital currency to several developed provinces by the end of 2022. It has already recorded $13.9 billion in e-CNY digital transactions and 260 million app downloads.

Whatever the use case, the CBUAE appears to be one the most promising countries in the MENA region when it comes to a CBDC launch, followed by Saudi Arabia, which recently hired a virtual assets and CBDC program lead.

While it’s still unclear when this will happen and what type of CBDC will be launched, the UAE inevitably will have to embrace CBDCs in its effort to build its crypto economy.

The Saudi Central Bank, better known as SAMA, has appointed Mohsen AlZahrani, former Managing Director of Financial Services at Accenture KSA as Virtual Assets and CBDC (Central Bank Digital Currency) program Lead. AlZahrani recently announced this on his LinkedIn profile.

This is a significant announcement given that KSA Central Bank has been working on its CBDC project since it announced its Aber project with UAE back in 2019. At the time both The Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) clarified in a joint statement that one of the objectives of launching the common digital currency project ” Aber” is for use in financial settlements between the Kingdom of Saudi Arabia and UAE through Blockchains and Distributed Ledgers technologies.

 It was known that IBM was one of the vendors working on the project.

In addition six commercial banks, three from UAE and three from KSA participated in the joint digital currency project “Aber”. The banks were AL Rajhi, Alinma ,Riyadh Bank, FAB , Emirates NBD , Dubai Islamic bank.

 In 2020 both Central Banks released their final report on Aber Pilot. As per the report Aber project identified further areas that need to be explored in the future if the approach of a single digital currency is to be implemented. The key amongst these was the need to understand impacts to the monetary policy of participating states and to address, in particular, the means by which interest is calculated and disbursed to the commercial banks in each jurisdiction and how this can be applied with a single digital currency.

The report also noted that in terms of future work, there were many directions that could evolve. Firstly, it could provide the basis for a backup to domestic and regional RTGS; providing a more distributed and potentially resilient alternative to the centralized systems that are implemented or being implemented today. Secondly, by offering DLT-based payments rails,  the possibility to expand to Delivery versus Payment (DvP) scenarios such as using the Aber network as a means of settlement for other forms of transaction, such as the sale of bonds or other dematerialized assets. Thirdly, there was the possibility of extending it geographically to include regional or other international central banks or linking heterogeneous networks together.

In 2021 Saudi’s Central Bank in a statement to Iqtissadiah news entity stated that were making efforts to support innovation by looking at various technologies including CBDCs mostly built on DLT and Blockchain platforms.

Then in 2022 Price Water house Coopers published their 2022 Central Bank Digital Currency (CBDC) Index and stablecoin overview. In the PWC report when showcasing the progress of Central Banks in terms of wholesale CBDC front, both the UAE and the Kingdom of Saudi Arabia (KSA) were among the top 10 globally.

As conclusion the recent appointment showcases the commitment the Central Bank of Saudi Arabia has towards not only CBDC but virtual currencies as well. We will just have to wait and see!

The Executive President of the Central Bank of Oman, Mr. Tahir Salim Al Amri, commented during the 7t Edition of the new Age Banking Summit on the topic of CBDCs (Central Bank Digital Currencies)

As per a tweet from Oman News Agency stated, “The Central Bank of Oman is working to issue its own CBDC. Many central banks are studying the possibility of issuing their own CBDCs and the Central Bank of Oman is committed to supporting innovation in the financial sector.”

He also mentioned that work was underway to open banking API services and overcoming challenges that face the digitization sector, and stressed the importance of cyber security.

In April 2022, Oman Capital Market Authority announced that it would incorporate real estate tokenization within its virtual assets regulation as well as license crypto exchanges. The Oman virtual asset regulation will be finalized by Q3 of 2022.

Kemal Rizadi, Advisor at the Oman Capital Market Authority made these comments during the Real Estate Exhibition and Conference held in Muscat Oman. As per the comments, real estate tokenization is an option being considered in the proposed virtual asset regulatory framework under process within CMA.

Earlier this year in January 2022 The Oman capital markets Authority announced a tender for specialized companies to assist in setting up a legislative and regulatory framework for virtual assets and licensing supervision and regulations of Virtual assets service providers within the Sultanate of Oman.

Finally it also seems that Oman is indirectly starting to enter the crypto mining sector. Oman’s sovereign wealth fund took an equity stake in a U.S. firm which helps fossil-fuel producers cut flaring by using stranded natural gas to power cryptocurrency mining instead.

Oman Investment Authority was part of the $350 million equity round that Crusoe Energy Systems Inc. raised in April, 2022 according to a statement.

US based Crusoe is opening an office in Oman to deploy power generators and mining equipment for capturing gas at well sites. These statements were made by CEO of Crusoe Chase Lochmiller. It is known that MENA accounts for about 38 percent of the world’s gas flaring.