The international bank summarized the results of the analysis conducted by its employees and reduced the negative impact on the banks' profits and their role as intermediaries in the government financial system due to the issuance of digital dirham. The central bank of the said state achieved significant successes and took significant steps in this area.
According to the latest report on financial stability, the central bank noted that the "digital dirham" could lead to a decrease of up to 5% in bank deposits in the scenario of extraneous realization, which, however, more likely will only indicate a negligible negative impact on the banks' profits. It noted that banks in the country have excessive liquidity, and this will not lead to a reduction in their lending activity and investments.
According to the analysis, the bank's employees assessed the increase in real GDP growth at 0.4% over five years as a result of using the digital dirham, which leads to significant impacts on the network and well-being, as well as raising the likelihood of enhancing economic growth.
The central bank reported that in 2023, four pilot projects for using the digital dirham were launched with selected banks and a full life cycle of the digital currency of central banks was tested to ensure readiness for using these technologies.
The bank specified that it will continue to prepare for the launch of the digital dirham for various clients and international companies at different stages in the coming years. It noted that the launch of the digital dirham corresponds to the initiative of the digital currency of central banks of other countries, which contributes to trust in the safe use of digital outputs of this currency.
The bank also emphasized that the use of digital currencies by central banks should be carried out cautiously in addressing related risks such as confidentiality, cybersecurity, illicit cash flows, financial and monetary stability, as well as the existing financial system and banking system.
It is important to highlight the differences between physical and digital currencies of central banks, which are centered on the following:
- Digital currencies of central banks can be used directly for electronic payments. - No expenses are incurred for storing digital currencies of central banks. - It is necessary to consider the confidentiality of these digital currencies of central banks in the context of competition with cash and financing terrorism.
