MAYS IBRAHIM (ABU DHABI)
The digital dirham is all set to be launched by early 2025, following the completion of all pilot phases, said Paul Kayrouz, Chief Fintech Officer at the Central Bank of the UAE (CBUAE), on Wednesday.
In his keynote speech at Fintech Abu Dhabi, Kayrouz outlined CBUAE's comprehensive FinTech strategy, propelling the UAE's growing role as a leader in the global financial services landscape.
The strategy is focused on five main pillars: a forward-thinking regulatory framework, collaboration with global financial players, talent development, advanced financial market infrastructure, and strengthening the overall fintech ecosystem.
"We've been, just to date, collaborating with more than 60 central banks and more than 1,200 regulated fintech firms from all over the world and more than 800 financial institutions," said Kayrouz. "Talent, especially AI readiness, has been at the centre of what we do. We've been working closely with universities like MIT, Oxford, to help co-create programmes that are very niche and very specific to upskill and reskill local talent".
He also explained how the CBUAE is overhauling the financial market infrastructure with significant initiatives such as the Aani Instant Payment Platform, which allows for real-time payments across the country and the Central Bank Digital Currency (CBDC), designed to streamline digital transactions.
A major component of the CBUAE's strategy is strengthening the fintech ecosystem by creating an environment where banks, fintechs, and startups can collaborate effectively, according to Kayrouz.
One of the initiatives bringing this vision to life, he said, is the introduction of CBUAE's Stablecoin Regulation, which allows for the issuance of a dirham-backed stablecoin and outlines comprehensive guidelines for its issuance, custody, and conversion.
Another key example is open finance. "We have developed one-of-its-kind open finance framework that allows fintechs and banks to seamlessly share data and carry out payment initiation activities," said Kayrouz.
"Our open finance regulation goes way beyond payments. It also includes insurance, banking, and soon enough, we will allow also for capital market products to be captured within our open finance framework. This is how we're moving the economy toward a digital economy and enabling an open data society."
Kayrouz also spotlighted the role of technology in transforming financial infrastructure. CBUAE's Aani Instant Payment Platform allows for instantaneous payments, and future developments will include the ability to make payments via facial recognition. Another major project, the J1 Domestic Card Scheme, aims to boost digital payments in the UAE, with its phased rollout expected to begin next year.
In addition to driving domestic innovations, CBUAE is focused on expanding the global reach of UAE-based fintechs.
Through Project Aperta, a collaboration with Brazil, India, Hong Kong, Singapore, and the UAE, local fintechs can gain access to international markets, reaching a combined population of over 350 million people, Kayrouz said.
Another ambitious initiative, mBridge, a cross-border wholesale CBDC payment system, has already processed over $7 billion. This project, developed in partnership with China, Hong Kong, and Thailand, is set to revolutionise international payments and improve the efficiency of cross-border transactions, according to Kayrouz.
He also shared plans for the upcoming launch of a Centralised eKYC Platform, which will streamline the onboarding process for SMEs.
This platform will cut account opening times from as long as 90 days to just a few hours-an unprecedented move at a national level, Kayrouz noted.