UAE, India to boost cooperation via digital currency

UAE, India to boost cooperation via digital currency

The United Arab Emirates and India are continuing to further bilateral cooperation, including with a digital currency initiative announced on Thursday. 

The UAE Central Bank signed an agreement with the Emirati artificial intelligence firm G42 Cloud to start the process of ultimately launching a digital form of the Emirati currency, the dirham. The strategy will include feasibility work with India for the purpose of trade, the soft launch of a program called “mBridge” to facilitate international trade with the currency, and feasibility work on using the currency for wholesale and retail domestically, the bank said in a statement. 

The announcement follows the Emirati Central Bank and India’s Reserve Bank signing a memorandum of understanding last week on increasing cooperation regarding financial innovation. The digital dirham announcement also follows pilot programs with the central banks of India, China, Thailand and other entities, according to another statement. 

What it means: Digital currency refers to currency that can only be held and traded digitally, as opposed to fiat money. It is appealing because it does not require an intermediary to be used. Digital coins pegged to foreign currencies already exist, such as USDC, which is pegged to the US dollar. Digital currency has potential value for facilitating