Digital Transformation in Finance in the UAE: CBDC and Institutional Cooperation
Digital Transformation in the Financial Sector of the United Arab Emirates
The United Arab Emirates (UAE) are at the forefront of testing and implementing innovative solutions in the field of digital finance. As one of only 36 countries worldwide testing CBDC (Central Bank Digital Currency), the UAE is a true leader in this area. Support for the digital transformation process of companies is provided by the Institute of Chartered Accountants in England and Wales (ICAEW) and the UAE Banks Federation (UBF).
The Role of ICAEW and UBF in the Digitization Process
ICAEW and UBF have partnered to assist companies in adapting to the changing landscape of digital assets. Hanadi Khalife, the Middle East Chief at ICAEW, emphasizes the importance of adequately preparing accountants to handle new solutions in the digital era. The collaboration between the institutions aims to support the transformation related to the CBDC pilot in the UAE and analyze the potential of this innovation in banking operations, stability, and security.
Challenges of Digital Transformation
The development of digital assets is currently of great importance, however, in the UAE, there is a lack of standardized accounting frameworks for these types of assets, which can lead to ambiguity in reporting. Therefore, cooperation between IT, audit, and finance departments in companies is necessary to effectively manage digital assets and ensure transparency in reporting.
The Significance of the United Arab Emirates on the Global Stage of Digital Finance
The UAE holds a significant position in global digital asset trading, accounting for 5-10% of the global transaction volume, confirming their growing importance in the global landscape of digital finances. In the age of advancing digitization in finance and the increasing risks associated with cybercrime, actions must be taken to enhance transaction security and develop appropriate accounting standards for digital assets.
