Dubai said the partnership will go a long way to achieve its goal of getting 90% of financial transactions fueled by cashless technology by 2026.
The government of Dubai has signed an agreement with crypto exchange Crypto.com to launch crypto payments for government services.
The agreement, formalized during the Dubai fintech Summit on May 12, is part of Dubai’s cashless strategy, which hopes to foster the city’s transition to “a fully digital, cashless society,” by introducing “a new digital payment channel across its official platforms,” the Dubai Department of Finance (DOF) said on May 12.
Once the service goes live, individuals and business customers of government entities can pay service fees with crypto through Crypto.com’s digital wallets. The payments will be converted into dirhams and transferred to DOF accounts, according to the DOF.
Amna Mohammed Lootah, director of digital payment systems regulation, stated that Dubai’s plan is for 90% of financial transactions across the public and private sectors to be powered through cashless methods by 2026.
“We are confident that this milestone will significantly accelerate the advancement of the Dubai Cashless Strategy,” she said.
The DOF didn’t specifically mention which crypto it would start accepting, but did say the payments could be made using “stable cryptocurrencies,” possibly indicating stablecoins will be allowed.
A trio of major Abu Dhabi institutions, including the Emirate’s sovereign wealth fund, announced on April 28 a plan to launch a new dirham-pegged stablecoin.
Dubai’s strategy hopes to spark fintech sector expansion
The city’s cashless strategy was first announced in October 2024. At the time, the DOF said 97% of all government payments in 2023 were already digital.
The strategy has also been predicted to add at least 8 billion dirhams ($2.1 billion) to the economy, according to the DOF, fuelled by the development of financial technology services and the accelerated expansion of Dubai’s fintech sector.
Ahmad Ali Meftah, executive director of the central accounts sector at DOF, said in a statement the government is still actively developing a regulatory framework that “fosters innovation while ensuring the highest standards of security and efficiency” in digital financial transactions.
Meanwhile, on March 19, the Dubai government started the pilot phase of a project to convert real estate assets into digital tokens on the blockchain.
Other governments have also floated using crypto for payments. A New York lawmaker introduced legislation in April to allow state agencies to accept crypto payments.
Source: cointelegraph
