Banking News

Dubai to launch blockchain payments. Central Bank Digital Currency?

Dubai

Soon Dubai citizens and residents will be able to make digital currency payments for school fees, utility bills and retail purchases. Emcredit, a state-backed subsidiary of the Department of Economic Development, will release the stable digital currency emcash, a digital equivalent of the UAE dirham (AED). Emcredit is the primary supplier of credit information in Dubai.

The statement was a partnership announcement. Development has to be completed, and the group plans to submit the project to the government for testing and approval later in the year. It is unclear whether this will be a Central Bank Digital Currency (CBDC) or a stable coin. Given the government involvement, a CBDC is a possibility.

Subject to confirmation as a CBDC and depending on the launch date, apart from Venezuela, this will be the first substantial CBDC. Numerous significant economies are exploring the topic. Four months ago, the BIS voiced its thoughts about CBDCs. It has reservations about retail use but is more relaxed about wholesale applications within the financial services sectors.

Indonesian company PundiX will produce the point of sale devices, and Dubai fintech ebooc will manage the digital wallet.

ebooc was co-founded by Abdulla Al Shamsi who is also Assistant Undersecretary, Industrial Development Sector at Ministry of Economy, UAE.

In the statement, an emcredit spokesperson said: “To be the world’s first city to offer blockchain-based payment solutions to our residents is an exciting moment for Dubai. It confirms Dubai’s status as an international tech hub. Deploying cutting-edge technology such as blockchain is a key priority and is delivering benefits to our citizens in the form of convenience and securities to customers and merchants across Dubai”.

Abdulla Al Shamsi, CEO DFP and Co-Founder ebooc said: “We are delighted to be a part of this historic partnership when Dubai launches the world’s 1st first digital currency – emcash. We also envisage consumers in Dubai being able to make real-time payments using Dubai’s digital currency for all their payment needs for shopping, paying for Government fees etc. ebooc is also looking at extending its reach as an exclusive POS partner of Pundi X”.

Other UAE blockchain projects

Two weeks ago the Smart Dubai Office announced a blockchain-based Payment Reconciliation and Settlement system. There are also two blockchain logistics projects, one in Dubai and the other in Abu Dhabi.