Financial innovation a key enabler for economic diversification - Al Sayegh

Apr 22, 2021 0 comments
Ahmed Ali Al Sayegh, UAE Minister of State, said that the UAE and China have nourished a deep respect, political confidence and support of each other for decades, with their governments working even more closely on joint activities and projects, not only to boost the Belt and Road initiative, but also the well-being of our economies and societies. The minister's remarks came while addressing the "Bo-ao Forum for Asia", held in celebration of Bo’ao’s 20th Anniversary this year.

Financial innovation a key enablers for economic diversification - Al Sayegh

"Chinese President Xi Jinping's 2018 state visit to the UAE and the visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to China in 2019, had forged a stronger partnership and ushered in new and exciting areas of cooperation between the two countries. These include innovation and technology, financial services, education, food security, energy security, healthcare to climate change," he added.

He congratulated Ban Ki Moon, Chairman of the "Bo-ao Forum for Asia" on the celebration of Bo’ao’s 20th Anniversary this year. "This is a landmark achievement and a testament to the undeniable importance of BFA in supporting the Asian growth and fostering globalization over the years. There is no doubt that this is Asia’s century."
Al Sayegh added that Asia and the Middle East region have maintained long and mutually respectful, strong trade and cultural ties. Likewise, China and the UAE have nourished a deep respect, political confidence and support of each other for decades. Both governments and UAE entities are working even more closely on joint activities and projects, not only to boost the Belt and Road initiative, but also the well-being of our economies and societies. "As such, I am honored to be part of the Bo’ao conversation to discuss and share how dynamic consumer needs, digital technology and increasing cross-border interactions are changing the economic and financial sectors across the globe.

"In fact, there has been an accelerated adoption in digital innovation. More countries, governments and sectors are embracing technology advancements and integrating digitalization in every key aspects of their economies and lives." Al Sayegh noted that policy-makers, central banks and regulators are also using their roles as catalysts and facilitators to further digital innovation, increase interoperability or integration in cross-border activities. Of which, the focus on digital currencies and digital payments has taken centre-stage.

"Digital currencies are a promising new innovation that could address varying needs such as broadening financial inclusion, better serving the unbanked and smoothening cross-border trade flows, The digital currencies that could become more widely adopted are: "First - Retail central bank digital currencies (CBDCs). Second - Wholesale CBDCs, which financial institutions can use for large value payments; and Third - Stablecoins, which are issued by private sector players adopted by the client network of such issuers."

"For the Middle East region, financial innovation has become one of the key enablers for economic diversification and solution for growth. This is particularly relevant in view of the Middle East and North Africa (MENA) region’s demographics. The MENA region is home to 450 million people. Of that total, about half of the population is younger than 25 years old. A youthful population of such size presents an attractive and fast-growing market of early technology adopters. At the same time, almost half of this population have limited or no access to financial services. This creates a huge opportunity to provide the MENA markets with more financial and banking options including digital banking and FinTech. It is also a big opportunity to offer digital banking solutions to markets where physical bank branches are scarce or hard to reach," he added.

Strategically placed in the capital of the UAE and heart of the MENA region, Al Sayegh continued, "Abu Dhabi Global Market (ADGM) was set up in 2015 to provide a progressive International Financial Centre ecosystem that supports financial institutions in Abu Dhabi and champions the development of innovative financial solutions to address the evolving financial needs in the region. The minister concluded with a positive note over the benefits that digital currencies will bring to the financial sector and economy, broadening access to financial services and making cross-border trade more efficient.

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