The International Monetary Fund (IMF) has found that 19 countries, including the United Arab Emirates (UAE), are in the advanced stages of testing central bank digital currencies (CBDCs). Bahrain and Saudi Arabia in the Middle East are also continuing their CBDC tests. Georgia and Kazakhstan have moved to the “proof-of-concept” stage after successful CBDC pilot programs, as indicated by the IMF.
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Among the five leading countries in the BRICS alliance, a digital currency is emerging to facilitate cross-border payments, potentially challenging the monopoly of the US dollar in global trade. This action is expected to impact various sectors of the US economy.
According to the IMF, CBDCs have the potential to enhance financial inclusion and payment efficiency in BRICS and Middle Eastern countries. Specifically, they could improve international payment services aimed at eliminating inefficiencies, such as differences in data formats, operational rules in different regions, complex regulatory compliance checks, etc.
This could lead to a significant reduction in transaction costs, which would be most beneficial for oil exporters such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, which are members of the Gulf Cooperation Council (GCC).
