United Arab Emirates CBDC Tracker

The United Arab Emirates is in the pilot phase. According to the United Arab Emirates government, the first phase of its CBDC strategy included a soft launch to facilitate cross-border CBDC transactions, a proof-of-concept with India, and a proof-of-concept for domestic issuance. It is therefore considered to be in the pilot phase.

CBDC History and Development

Beginning in 2018, the Central Bank of the United Arab Emirates joined the Saudi Central Bank in a wholesale CBDC pilot referred to as Project Aber. The project was designed to evaluate the feasibility of issues a wholesale CBDC to improve cross-border payments and transfers between banks. The project also focused on evaluating the effectiveness of distributed ledger technology.

In 2021, the Central Bank of the United Arab Emirates began working with the Bank for International Settlements on a wholesale CBDC pilot (referred to as Project mBridge). As the Bank for International Settlements describes it, Project mBridge “seeks to solve some of the key inefficiencies of cross-border payments, such as high costs, low speed and transparency, and operational complexities. At the same time, the project aims to safeguard currency sovereignty and monetary and financial stability for each participating jurisdiction, guided by the principles of "do no harm", compliance and interoperability.”

In 2022, the Central Bank of the United Arab Emirates announced that it had successfully completed Project mBridge.

In 2023, Central Bank of the United Arab Emirates governor Khaled Mohamed Balama said, “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.” His statement was in public press release that announced the launch of the central bank’s CBDC strategy. The document stated that the first phase of the CBDC strategy would take 12-15 months and include a soft launch to facilitate cross-border CBDC transactions, a proof-of-concept with India, and a proof-of-concept for domestic issuance (in both retail and wholesale applications). This work was done with the companies G42 Cloud and R3

Human Rights and Civil Liberties Concerns

The United Arab Emirates earned an 18 out of 100 in Freedom House’s 2023 Freedom in the World report. There are many concerns present, but the most pressing concerns related to the issuance and use of a CBDC are the restrictions on free expression and the use of mass surveillance.

According to Freedom House, “The 1980 Publications and Publishing Law, considered one of the most restrictive press laws in the Arab world, regulates all aspects of the media and prohibits criticism of the government.” In fact, it was further reported that “A number of well-known commentators have been jailed in recent years for criticizing the authorities, expressing support for dissidents or human rights, or calling for political reform. Leading human rights activist Ahmed Mansoor, who received a 10-year prison term in 2018 for using social media to ‘publish false information that damages the country’s reputation,’ remained behind bars in 2022.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

The United Arab Emirates “deploys advanced surveillance technologies to monitor public spaces, internet activity, and individuals’ phones and computers,” according to Human Rights Watch. Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default. Financial transactions reveal people’s professions, relationships, locations, and so much more. It is very likely that governments would abuse this data.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.