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In Dubai, the payment for government services will be launched using cryptocurrencies. How is this possible?
The Dubai government will start accepting payments for government services in cryptocurrency. This is a step towards transitioning the region to a fully digital, cashless society, according to a press release from the Dubai Department of Finance (DOF).
DOF announced a partnership with the cryptocurrency exchange Cryptо.соm, which will allow payment for government services with cryptocurrency. Representatives of the Dubai government and the president of Cryptо.соm UAE, Mohammed Al Hakim, signed a memorandum of understanding during the FinTech summit in Dubai.
The DOF stated that this partnership will help implement the "Dubai’s Cashless Strategy," aimed at strengthening Dubai’s status as a leading digital city. The strategy aims for 90% of transactions in the public and private sectors to be conducted without cash by 2026.
As soon as the necessary technical measures are completed, individuals and legal entities that are clients of government institutions will be able to pay for government services using cryptocurrency wallets of the exchange. The platform will then convert these payments into UAE dirhams and transfer them to DOF accounts.
This partnership supports the implementation of a cashless payment strategy in Dubai and paves the way for Dubai's transition to a fully digital, cashless society, allowing the Dubai government to implement a new digital payment channel on its official platforms, according to the statement.
"This initiative will ensure seamless and secure payments for government services using stable cryptocurrencies, further strengthening Dubai's position as a global center for financial innovation," said Dubai Finance.
At the end of April, the sovereign fund ADQ, the conglomerate IHC, and the largest bank in the UAE, First Abu Dhabi Bank (FAB), announced plans to launch a new stablecoin backed by the national currency - the dirham. The project will be regulated by the Central Bank of the UAE and implemented through FAB bank.
The new stablecoin is intended to be used in everyday payments as well as in new digital scenarios, including artificial intelligence interactions and device-to-device transactions. The project initiators also believe that the launch of the stablecoin will strengthen the country's digital infrastructure and help the UAE become one of the centers of global financial technology.