This CBUAE working paper introduces the concept of the Digital Dirham, the UAE's upcoming digital currency. It explores policy considerations for its implementation, including its potential impact on monetary policy, payment systems, and financial inclusion. The paper also addresses potential risks related to financial stability and cybersecurity.
Key requirements
- Integrate the Digital Dirham into the payment system to function as legal tender.
- Implement a two-tiered distribution model involving licensed financial institutions.
- Incorporate design features and policy principles to mitigate potential risks to financial stability.
- Apply appropriate restrictions on Digital Dirham usage to prevent large-scale shifts from deposits and savings.
Applies to: Central Bank of the UAE (CBUAE), licensed financial institutions in the UAE