The UAE and other Gulf Cooperation Council (GCC) region are technologically equipped to roll out central bank digital currency (CBDC) but the policies related to the dollar peg and its impact on existing banking structure could delay the rollout, experts said at World Government Summit on Tuesday.
They believe that the GCC region is very quick to embrace new-age technologies also and also doesn’t face the old infrastructure legacy challenge that most of the Western countries have.
Zied Brini, delivery director for EMEA at ConsenSys, said the shift is happening towards increased usage of virtual assets and digital currencies and now it’s a case of ‘not if but when' the countries will roll out the digital currencies.
Brini expects that some central banks could roll out digital currencies on a limited scale.
“GCC is one of the most promising regions in the world we have worked with. We are having a conversation with the GCC for retail CBDC. Governments are super interested from a technology standpoint. The Gulf region doesn’t have the burden of the legacy of old infrastructure that Europe and America faces. Therefore, this is a great opportunity for them to switch to the latest technology and adopt it,” he said.
Patrick Campos, chief strategy officer at Securrency, added that there has been certainly a lot of work being done on CBDC in the region and Asia.
“At the wholesale level, some live experiments have been done. How that translates into retail space is a little bit more difficult to foresee. For example, how retail CBDC impacts the banking sector and dollar peg. So there is a lot that goes into thinking about retail CBDC to replace cash,” Campos during a panel discussion on Tuesday at the Summit.
From a technological perspective, he said it’s not long before CBDC can be introduced as technology is in place in the GCC region. “The issue is policy and getting the policy right – not just domestically but how does it interact with international policies and trade relations with other countries. The speed to introduce CBDC is dictated by individual governments’ ability to sort those issues.”
Campos predicted that there is a likelihood that if one country successfully rolls out CBDC, then other nations could also jump the bandwagon and launch a digital currency.
Bill Chin, vice-president and head of investment, Binance Labs, said 95 per cent of the world’s population doesn’t have access to cryptos.
He revealed that there will be more collaboration and more capital allocation to cryptos from institutional investors.
“In the past five years, global players began to invest in cryptos. This industry will grow rapidly similar to other alternative assets,” he added.