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Central Bank digital currencies drive collaboration between banks and FinTech in the UAE

CBDCs bridge the gap that has left digital assets as niche products

Central Bank Digital Currencies (CBDCs) are transforming the financial landscape, and the UAE is rapidly advancing in this innovative space. As part of its strategy for a digital dirham, the Central Bank of the UAE has embraced the development of CBDCs as a means to enhance financial inclusion and advance the financial sector.

Konstantin Vladimirovich Tserazov, a financial expert and former Senior Vice President at Otkritie Bank, sees this move as a catalyst for unprecedented collaboration between banks and FinTech companies in the UAE.

A strategic business consultant for international fintech firms and a member of advisory boards across CIS and Middle Eastern financial institutions, Konstantin stresses that the UAE’s CBDC initiative will address unbanked populations, enabling them to access financial systems, receive government aid, and engage in secure, seamless transactions.

AI: The FinTech game-changer

He underscores the role of artificial intelligence (AI) in this transformation. “AI technology is now the fuel of the modern FinTech ecosystem, either serving as the foundation for new applications or becoming a daily tool within FinTech operations,” he states. AI is expected to reshape CBDC usage by introducing autonomous AI assistants that can navigate complex financial landscapes, guiding users with an unprecedented degree of efficiency and personalised support.

“In the near future, AI-driven assistants will evolve in autonomy, introducing unique tech entities that serve as independent agents within the financial system,” he explains. This, he believes, will become a driving force in the adoption of CBDCs and legacy banking services alike, as these systems provide the reliability and security required by AI entities in a digital finance ecosystem.

The answer to crypto’s adoption gap

Despite the global rise of digital assets, cryptocurrencies like Bitcoin have seen limited adoption. Konstantin posits that CBDCs, supported by central banks, could offer a more viable alternative.

“CBDCs bridge the gap that has left digital assets as niche products, bringing stability and trust through regulated central bank oversight,” he says. Additionally, their design allows for energy-efficient transactions, addressing a significant challenge faced by other digital assets.

Konstantin asserts that CBDCs will redefine financial inclusion for both people and AI entities,

ultimately contributing to the “Internet of Digital Finance.” This concept envisions a globally connected financial ecosystem where FinTech startups play a key role in integrating CBDCs, AI, and traditional banking into one seamless network.

“Gulf countries, particularly the UAE, have the infrastructure, vision, and resources to lead this wave of financial innovation,” Konstantin notes. With a sustainable energy foundation, the region can support AI-driven FinTech startups and usher in a new era of digital finance.

Konstantin believes that CBDCs, powered by AI and fostered by collaborative efforts between banks and FinTech, will drive the UAE’s vision of inclusive, secure, and efficient digital finance forward.