The UAE is prepared to make key decisions that will overhaul its current financial systems using cutting-edge next-generation fintech capabilities. After establishing a favourable environment for the cryptocurrency sector, the UAE is now concentrating on integrating its central bank digital currency (CBDC) into the economy. 

The blockchain network is used to create CBDCs, which are digital representations of current fiat currencies. In addition to creating permanent, unchangeable records on the blockchain, transactions handled using CBDCs also significantly reduce transaction costs, even for instantaneous international transfers.

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The UAE's financial authorities have started putting the finishing touches on creating the necessary technological and cyber security support as part of their Financial Infrastructure Transformation Programme (FIT).

Nine major initiatives are implemented as part of the programme. According to an official article outlining the focal points for FIT, the first stage involves a number of digital payment infrastructures and services, including the introduction of a card domestic scheme, an instant payments platform, and the issuing of CBDC for cross-border and domestic purposes.

In the upcoming years, a cashless society will be supported by the UAE. By 2026, it expects to have fully implemented its CBDC plans.

The development and testing of the digital dirham are being managed by the UAE's central bank (CBUAE).

In the coming ten years, the UAE is betting that fintech technologies powered by blockchain might increase financial security, lower operating costs, and increase creativity.

The UAE published a complex set of legislation to regulate its cryptocurrency industry last year. The country wants to become a centre for companies in the digital assets industry.

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To regulate cryptocurrency-related enterprises there, Dubai established the Virtual Assets Regulatory Authority (VARA), a specialised regulatory body.

The UAE has now advanced towards the creation of its own CBDC, joining other countries including Kazakhstan, India, China, the UK, Turkey, and China.