According to the International Monetary Fund (IMF), GCC countries can improve financial inclusion and enhance the efficiency of cross-border payment services through the adoption of central bank digital currencies (CBDCs). The IMF, based in Washington, highlighted that CBDCs are a significant priority for GCC nations, including the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, and Qatar, as stated in a recent departmental paper titled 'Central Bank Digital Currencies in the Middle East and Central Asia.' At least 19 countries in the Middle East and Central Asia are progressing towards issuing CBDCs. The UAE, Saudi Arabia, Bahrain, and Georgia have advanced to the proof-of-concept stage, while most others are still in the research phase. In January 2024, the UAE conducted its first cross-border payment using the Digital Dirham, transferring Dh50 million to China via the mBridge platform, which includes both countries and Hong Kong as participants, with 23 additional central banks as observers. Last year, the UAE and China agreed to enhance digital currency payments between them. The Central Bank of the UAE executed this transaction during its 50th anniversary celebrations, coinciding with the first BRICS meeting after expanding to 10 member countries, including the UAE. The CBUAE is promoting the integration of commercial banks and payment processors into the Digital Dirham pilot program and has mandated the adoption of Digital Dirham by all UAE-licensed financial institutions by 2026. The IMF noted that CBDCs can reduce transaction costs by addressing inefficiencies in cross-border payments, such as varying data formats and complex compliance checks. CBDCs can also promote financial inclusion by fostering competition in the payments market and reducing the cost of financial services. However, CBDCs could potentially compete with bank deposits, affecting bank profits and financial stability. The Qatar Central Bank recently announced the development of its CBDC infrastructure, with the first experimental phase set to extend until October 2024.