The UAE's Central Bank has announced a new programme to accelerate digital transformation in the financial services sector, with initiatives spanning open finance and a new digital currency.
The Financial Infrastructure Transformation Programme also includes a domestic card scheme, an instant payments platform, financial cloud and supervisory technology, the Central Bank said in a statement on Sunday.
The new Central Bank Digital Currency (CBDC) will be used for both cross-border payments and domestic usage to “address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments respectively”, the regulator said.
“The FIT programme embodies the directions and aspirations of our wise leadership towards digitising the economy and developing the financial sector,” said Khaled Balama, the Governor of the Central Bank.
“We are proud to be building an infrastructure that will support a thriving UAE financial ecosystem and its future growth.”
Central banks are looking into the development of digital currencies amid the growing popularity of cryptocurrencies as an asset class among retail and institutional investors.
The Bank of England and Treasury have set out a plan to introduce a new central bank currency, including a new state-backed digital pound that could be launched this decade.
Last year, the Reserve Bank of India rolled out its first pilot scheme for the e-rupee, allowing some banks to use the digital rupee to settle secondary market transactions in government bonds. The RBI plans to start testing the retail uses of the digital form of the Indian rupee.
Oman's central bank is also developing a digital currency and open banking services, the country's state news agency reported last year.
The rapid development of CBDCs could help to boost financial inclusion and stability, according to Fitch Ratings.
CBDCs will continue to gain momentum as regulators keep tailoring them to complement cash with digital central bank money, Boston Consulting Group said in a recent report.
The payments industry revenue in the UAE is expected to grow to $18.7 billion by 2031, driven by the young and tech-savvy population in the country, the report added.
Through the FIT programme, the UAE Central Bank will strengthen its digital leadership by adopting “advanced” supervisory technologies and data management solutions, it said.
It will also seek to develop and implement a number of digital infrastructures, including the establishment of eKYC (electronic know your customer) and an innovation hub to support the development of financial technology.
The new domestic card scheme will feature the UAE’s “first unified, secured and efficient card payment platform to facilitate the growth of e-commerce and digital transactions in the country”, the Central Bank said.
“These digital infrastructures will improve regulatory compliance, reduce cost of operation, enhance innovation and customer experience, and most importantly, strengthen their security and operational resilience,” the regulator said.
Last month, the Central Bank issued new guidelines for licensed financial institutions, including banks, finance companies, exchange houses and insurance companies, agents and brokers, to combat money laundering and the financing of terrorism.
The new guidelines focus on the use of digital identification systems by licensed financial institutions, or LFIs, to address customer due diligence obligations.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UAE currency: the story behind the money in your pockets
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
