The Dubai government has begun the process of developing its own encrypted digital currency for nationwide implementation.
The governor of the UAE Central Bank, Mubarak Rashed Al Mansouri, may have warned against the use of bitcoin over the high propensity for abuse and lack of regulation, but the emirate appreciates the convenience and urgent need for a digital currency and has put in motion measures to introduce emCash, a virtual currency to facilitate payment for government and non-government services.
The currency will complement the emPay wallet (another government initiative to support contactless payments using near field communication through their mobile phones) and will be founded on blockchain technology. The currency will be developed by a Dubai Economy subsidiary, Emcredit, and UK-based Object Tech under the Dubai Economy Accelerators umbrella.
“Customers can choose between two payment options on the emPay platform – the existing dirham payment or emCash. While the dirham payment goes through normal settlement procedures, intermediaries and costs, emCash payments are settled directly between the user and merchant. emCash thus gives real-time value movement and merchants can pass the cost benefit to the emCash holder. It also reduces fraud as well as inflation since currency is issued in real-time based on actual demand,” explained Muna Al Qassab, CEO of Emcredit.
Noting that the virtual currency will change the way people live and do business in Dubai, and marks a giant leap for the city in harnessing game-changing innovations to improve ease of business and quality of life, Ali Ibrahim, the deputy director general of Dubai Economy, added that obtaining approvals from other UAE authorities will be taken into consideration if required.
A number of associated products to protect emCash wallet and digital documents, enable direct real-time settlement and peer-to-peer lending, and provide credit rating based on the distributor ledger of emCash will also be developed.