According to the International Monetary Fund (IMF), GCC countries, including the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, and Qatar, can improve financial inclusion and enhance the efficiency of cross-border payment services by implementing central bank digital currencies (CBDCs). The IMF highlighted this in a recent blog post, referencing a 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, with the UAE, Saudi Arabia, Bahrain, and Georgia already in the proof-of-concept stage. In January 2024, the UAE conducted its first cross-border payment using the Digital Dirham, transferring Dh50 million to China via the mBridge platform. The UAE and China have agreed to further promote digital currency payments between them. The Central Bank of the UAE is also encouraging commercial banks and payment processors to participate in a pilot integration for issuing the Digital Dirham, with a mandate for all UAE-licensed financial institutions to adopt it by 2026. The IMF noted that CBDCs can reduce transaction costs by addressing inefficiencies in cross-border payments, thereby promoting financial inclusion and competition in the payments market. However, there are concerns that CBDCs might compete with bank deposits, potentially affecting bank profits and financial stability. The Qatar Central Bank has announced the development of infrastructure for its CBDC project, which is set to begin its experimental phase by October 2024.