The Banking Executive Magaizne - March 2025 Issue

Central Bank of UAE able to obtain the Digital Dirham through licensed financial institu- tions, such as banks, exchange houses, finance companies and fin- tech companies, according to the use cases that will be activated. The is- suance of the Digital Dirham is ex- pected to take place in the last quarter of the year 2025 for retail sector. The Digital Dirham offers several key advantages and characteristics that drive development and innovation, including: • Tokenisation: The Digital Dirham facilitates to- kenisation, enhancing financial in- clusion and efficiency, and expanding access to liquidity through digital asset fractionalisa- tion. • Smart Contracts: The Digital Dirham is used with smart contracts to programme the execution of complex transactions automatically, settling them in- stantly, in addition to multi-stage and multi-party transactions that involve conditions or obligations. NEW SYMBOL In a move that demonstrates the progress of the Digital Dirham pro- gramme, the CBUAE today an- nounced the new symbol for the UAE's national currency in its physi- cal and digital forms. The letter was chosen, derived from the English name of the Dirham, to serve as an international symbol representing the nation's currency, incorporating two horizontal lines that embody the sta- bility of the UAE Dirham and in- spired by the UAE flag, to enhance financial and monetary stability. On the other hand, the Digital Dirham symbol features a circle surrounding the physical currency symbol, using the colours of the UAE flag to reflect pride and national identity. The sym- bol choice serves as evidence of the national currency's global reach and openness to a more prosperous fu- ture, and commitment to developing an innovative local financial ecosys- tem with a global perspective. INTEGRATED PLATFORM AND DIGITAL WALLET The CBUAE has developed an inte- grated and secure platform for the is- suance, circulation, and use of the Digital Dirham, including a Digital Dirham wallet. The wallet is de- signed for ease of use and manage- ment by both individuals and businesses, enabling a number of fi- nancial transactions, including retail, wholesale, and cross-border pay- ments, money transfers and with- drawals, top-ups, and redemption of the Digital Dirham when needed. This ensures a seamless and conven- ient user experience, in line with in- dustry best standards and practices. The platform is also characterised by its ability to easily incorporate inno- vative financial solutions tailored to emerging use cases driven by the rapid growth of the digital economy in the UAE. This contributes to ensur- ing a flexible and advanced financial system, further solidifying the UAE's competitive edge as a leading finan- cial hub and global digital payments platform. Khaled Mohamed Balama, Governor of the CBUAE, said, "We are proud to unveil today the new symbol for the UAE's national currency the "Dirham" in both its physical and digital forms, and the design of the Digital Dirham wallet. This reflects the significant advancements in the implementation of the Digital Dirham programme and a leap to- wards realising the CBUAE’s vision." He added, "It is anticipated that the Digital Dirham as a blockchain based platform with cutting edge ca- pabilities shall substantially enhance financial stability, inclusion, re- silience, and combatting financial crime. It will further enable the de- velopment of innovative digital prod- ucts, services, and new business models, while reducing cost and in- creasing access to international mar- kets.” ISSUE 195 MARCH 2025 the BANKING EXECUTIVE 21