Blockchain news

The Central Bank of UAE (CBUAE) inked an agreement with Abu Dhabi-based G42 Cloud and financial innovation firm R3 to accelerate the implementation of the UAE’s central bank’s Central Bank Digital Currency (CBDC) Strategy, according to WAM News Agency.

According to the agreement with the CBUAE, G24 Cloud and R3 will be the infrastructure and technology providers, respectively, for its CBDC implementation.

The Emirati central bank said that the CBDCs would help to address the weak points of domestic and cross-border payments, enhance financial inclusion and promote the transformation to a cashless society.

The CBDC’s first strategy, which is predicted to complete over the next 12 to 15 months, includes three major pillars, the 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, and finally, proof-of-concept work for domestic CBDC issuance covering wholesale and retail usage.

Earlier, CBUAE Governor Khaled Mohamed Balama said: “CBDC is one of the initiatives as part of the CBUAE’s Financial Infrastructure Transformation (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,” Balama added.

CBDC’s total value of payments is expected to grow 260,000% in the coming decade to record $213 billion annually by 2030, compared to $100 million in 2023, a new study revealed.

According to Juniper Research, the radical change will occur because of the increasing world governments’ adaption of the CBDCs to bolster financial inclusion and tighten control over how digital payments are made.

The value of transactions of eNaira, the Nigerian central bank digital currency (CBDC), has spiked 63% to record $44 million (22 billion nairas), Cointelegraph quoted a Bloomberg report as saying.

This increasing adoption of CBDC in Nigeria comes due to a shortage in fiat currency because the Nigerian central decided to replace older bank notes with bigger denominations because of rising inflation, therefore the lack of the banknotes forced the Nigerians to head for eNaira.

According to Godwin Emefiele, the Central Bank of Nigeria’s governor, nearly 13 million CBDC e-wallets have been opened an increase of 12 times compared to October in a country whose 90% of its transactions are being made through cash accounts.

What made the CBDC adaption in Nigeria increase is eNaira payouts in government initiatives and social schemes in addition to the government’s move to pay poor Nigerians money under a welfare program.

“The eNaira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions,” Emefiele noted, adding: “Of the more than 10 billion naira of the digital currency minted so far, about 3.4 billion naira is already in circulation.”

Earlier in October 2021, Nigerian President Muhammadu Buhari officially introduced the country’s digital currency after the Nigerian Federal High Court approved the rollout of a CBDC as a legal tender on October 2 of the same year.

CBDC’s total value of payments is expected to grow 260,000% in the coming decade to record $213 billion annually by 2030, compared to $100 million in 2023, a new study revealed.

According to Juniper Research, the radical change will occur because of the increasing world governments’ adaption of the CBDCs to bolster financial inclusion and tighten control over how digital payments are made.

CBDC is a digital coin issued by a central bank and pegged to the country’s fiat currency. It is not a cryptocurrency, whose value is determined by market supply and demand.

The research found that domestic payments would account for more than 90% of the total value transacted via CBDCs. Because they are issued by central banks, CBDCs will be targeted by domestic payments. The report suggested that the cross-border payments will happen later following stronger links and ties among entities in terms of CBDCs in the individual country.

Dubai Multi Commodities Centre (DMCC), the largest free-trade zone in the UAE, inked two memorandums of understanding with key South Korean entities specializing in the metaverse and blockchain on the sidelines of the DMCC’s Made for Trade Live roadshows in South Korea.

The two deals aim to enhance the presence of South Korean firms in DMCC and strengthen Dubai’s position as a leading hub for Web3 businesses from across the world, according to a statement released by the UAE center. 

The two South Korean entities are the Korea Blockchain Industry Promotion Association (KBIPA) and Seongnam City. The MoUs aim to bring the two South Korean entities to the DMCC Crypto Center and its new Gaming Center to expand the development of Web3 applications. 

During the event, senior officials of the DMCC highlighted that the South Korean Web3 sector represents a key target for DMCC. 

DMCC Executive Chairman and Chief Executive Officer Ahmed Bin Sulayem noted that South Korean firms would greatly benefit from expanding their operations in Dubai, saying: “DMCC is committed to supporting high-growth sectors such as the Web3 space. The signing of these MoUs with KBIPA and Seongnam City comes at a perfect time as we continue to accelerate our strategy of supporting businesses in these sectors. We are proud to contribute to the strong and resilient economic relations between the UAE and South Korea, which reflect the warm and friendly ties that our countries have always shared.” 

Meanwhile, officials from KBIPA and Seongnam City lauded Dubai as a leading position globally in Web3 technologies, noting the partnership with DMCC will create an amazing opportunity for many South Korean businesses operating in the area of metaverse technologies. 

It is worth noting that about 80 South Korean companies are operating in DMCC, located in the Jumeirah Lake Towers district of Dubai, which hosts more than 20,000 members.