#Implementing CBDC Strategy with Clifford Chance, R3, and G42 Cloud: What You Need to Know

04/04/2023 10:12 • Tech Ticker • 156 views

According to reports, the Central Bank of the United Arab Emirates (CBUAE) has chosen Clifford Chance, R3, and G42 Cloud to assist in implementing its CBDC strategy. The first phase of this strategy is expected to be implemented within the next 12 to 15 months, including three main pillars. This includes starting the cross-border CBDC transaction of real value for international trade settlement, proof of concept of bilateral CBDC bridge with India, and finally proof of concept of domestic CBDC issuance covering wholesale and retail purposes.

The Central Bank of the United Arab Emirates selects technical and legal partners for the CBDC project

##Introduction
The Central Bank of the United Arab Emirates (CBUAE) has recently announced the selection of three companies, Clifford Chance, R3, and G42 Cloud, to assist in implementing its Central Bank Digital Currency (CBDC) strategy. The first phase of this strategy is expected to be completed within the next 12 to 15 months, with three main pillars: cross-border CBDC transactions for international trade settlements, proof of concept of bilateral CBDC bridge with India, and proof of concept of domestic CBDC issuance covering wholesale and retail purposes.
##Understanding CBDC
CBDC is a digital currency created and issued by a country’s central bank. It is designed to work just like physical currency, functioning as a medium of exchange, unit of account, and store of value. However, unlike traditional fiat currencies, CBDC is entirely digital and is underpinned by blockchain technology, making it transparent, secure, and more accessible to unbanked individuals.
##The Benefits of CBDC
CBDC offers numerous benefits for users, including faster and cheaper cross-border transactions, improved financial inclusion, greater transparency, and greater efficiency for central banks. The implementation of CBDC will also provide a more robust payment infrastructure and greater financial stability for the economy.
##CBUAE’s Strategic Partnerships
Clifford Chance, R3, and G42 Cloud have been selected as the strategic partners of CBUAE in implementing its CBDC strategy. Clifford Chance is a global law firm with in-depth experience in blockchain technology and digital currencies. R3 is a leading provider of blockchain software and is well-known for developing the Corda platform. G42 Cloud is a UAE-based technology company that specializes in AI and cloud solutions.
##CBUAE’s Three-Pillar Strategy
The first pillar of CBUAE’s CBDC strategy is cross-border CBDC transactions for international trade settlements. This will enable more efficient and cheaper international transactions for both businesses and individuals.
The second pillar involves proof of concept of bilateral CBDC bridge with India, which will facilitate cross-border transactions between UAE and India. The bridge will allow direct and frictionless settlement in each other’s CBDC, making transactions more accessible, efficient, and cheaper for businesses and individuals from both countries.
The third and final pillar is proof of concept of domestic CBDC issuance covering wholesale and retail purposes. This involves the issuance of CBDC by CBUAE for both wholesale and retail markets, providing benefits such as faster and cheaper transactions, increased financial inclusion, and better access to credit.
##Conclusion
CBUAE’s partnership with Clifford Chance, R3, and G42 Cloud underscores the importance of innovation in the financial sector. The implementation of CBDC will provide numerous benefits for UAE’s economy, such as improved payment infrastructure, faster and cheaper transactions, greater financial inclusion, and greater efficiency for central banks. CBUAE’s three-pillar strategy is a firm step towards implementing CBDC and will undoubtedly facilitate UAE’s foray into the digital currency world.
##FAQs
1. What is CBDC?
CBDC is a digital currency created and issued by a country’s central bank and is underpinned by blockchain technology.
2. What are the benefits of CBDC?
CBDC offers numerous benefits, including faster and cheaper cross-border transactions, improved financial inclusion, greater transparency, and greater efficiency for central banks.
3. What is CBUAE’s CBDC strategy?
CBUAE’s CBDC strategy involves three main pillars: cross-border CBDC transactions for international trade settlements, proof of concept of bilateral CBDC bridge with India, and proof of concept of domestic CBDC issuance covering wholesale and retail purposes.
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