10th October 2022, Manama, Kingdom of Bahrain | The General Council for Islamic Banks and Financial Institutions (CIBAFI), the global umbrella of Islamic financial institutions, convened today a webinar on “Central Bank Digital Currencies (CBDCs): How it enables cashless societies and financial system stability?”.
With the advancement of digital technology in the financial services industry, from electronic payments to the growing interest in cryptocurrencies, Central Bank Digital Currencies (CBDCs) will be playing an increasingly important role in shaping the future of the financial sector. Several central banks around the world are now in various stages of evaluating the launch of digital currencies.
CBDCs play an important role in facilitating faster and more reliable payments, increasing financial access and inclusion, and improving monetary policies. However, significant challenges must be overcome before effective implementation can take place.
Islamic banks and financial institutions must be prepared for the impact of CBDCs on their operations, customer relationships, and innovation technology. The webinar today brought together key industry experts to discuss the global economic impact of CBDCs.
In his welcoming remarks, Dr. Abdelilah Belatik, Secretary General of CIBAFI said: “The global financial industry is currently facing a wave of disruptive trends and significant new digital technology developments. The rise of cryptocurrencies and blockchain technology has heightened interest in cashless societies and digital currency. As a result, governments and central banks all over the world are thinking about using government-backed digital currencies.”
Additionally, Dr. Belatik commented: “According to CIBAFI surveys, innovation is a critical factor in the development of the Islamic financial services industry. In this context, CIBAFI is committed to raising awareness of these emerging issues among its members and stakeholders. We intend to deliver specific projects with the support of the Innovation and Technology Working Group (ITWG) to assist Islamic banks and financial institutions in strengthening the adoption of financial technologies within their operations and services.”
Setting the scene for the panel discussion, the opening session also witnessed an intervention from Dr. Tao Sun, Deputy Chief of Payments, Currencies, and Infrastructure Division - Monetary and Capital Markets Department, International Monetary Fund. The speakers on the panel discussed the growth drivers and historical perspectives of CBDCs, as well as their current use cases and future prospects. The speakers also discussed the steps that Islamic banks and financial institutions should follow to embrace CBDCs. The session panelists included Ms. Azleena Idris, Director Corporate Services, Payments Network Malaysia; Dr. Hazik Mohamed, Managing Director and Principal Consultant, Stellar Consulting Group Pte Ltd, Singapore; Ms. Ainur Kenzhayeva, Head of the Digital Tenge Project, Payment and Financial Technologies Development Center, National Bank of Kazakhstan; and Mr. Mustafa Syed, Senior Manager, Digital Solutions, PWC Middle East. The session was moderated by Mr. Rachid Ettaai, Business Development Manager at CIBAFI.
CIBAFI continues to support the Islamic financial services industry through various activities and initiatives. These initiatives include providing industry stakeholders with a platform to discuss emerging issues, representing the industry at major global financial events, and sharing knowledge through specialized publications and comprehensive training programs.