UAE and Morocco Central Banks Forge Strategic Partnership on Banking Supervision and Islamic Finance
The Central Bank of the United Arab Emirates and Bank Al-Maghrib have signed two landmark memoranda to deepen bilateral cooperation, enhance regulatory frameworks and explore innovative financial solutions including digital currencies.
The Central Bank of the United Arab Emirates and Bank Al-Maghrib, Morocco’s central banking authority, have entered into a significant partnership through the signing of two Memoranda of Understanding at CBUAE headquarters in Abu Dhabi. The agreements, signed by Khaled Mohamed Balama, Governor of the CBUAE, and Abdellatif Jouahri, Governor of Bank Al-Maghrib, represent a substantial commitment to strengthening financial cooperation between the two nations.
The first memorandum focuses on enhancing supervisory collaboration and advancing Islamic finance development. Both institutions will exchange supervisory information concerning banks and financial entities, whilst coordinating on regulatory practices and supervisory methodologies. The agreement encompasses capacity building initiatives and the strengthening of Shariah governance frameworks specific to Islamic banking operations. Notably, the memorandum addresses the development of cross-border Shariah-compliant financing solutions, encompassing trade finance and infrastructure investment opportunities.
The second memorandum targets the interconnection of payment infrastructure and financial systems. Both central banks will explore possibilities for linking their instant payment platforms, national card switches and financial messaging systems. This initiative aims to streamline cross-border transaction processing and settlement whilst enabling reciprocal acceptance of domestic payment cards, subject to respective regulatory requirements.
The agreement further encompasses collaborative efforts in central bank digital currency development, with particular focus on retail and wholesale applications. Both institutions intend to investigate potential applications of CBDCs in cross-border payments between the two countries. Additionally, the memorandum addresses cooperation on fintech frameworks and the regulatory treatment of virtual assets, including cryptocurrencies and stablecoins, alongside consumer protection mechanisms.
Governor Balama emphasised the strategic significance of the partnership, noting that the agreements reflect the UAE’s commitment to expanding financial cooperation with Morocco in alignment with the nation’s leadership vision. He highlighted the anticipated benefits of exchanging supervisory expertise, developing innovative Islamic finance solutions, and strengthening payment system linkages to foster a more efficient financial sector and enhance economic relations.
Governor Jouahri characterised the memoranda as a pivotal advancement in consolidating the institutional relationship between both central banks. He underscored the opportunities these agreements create for developing cross-border financial transactions, accelerating their processing, and exploring CBDC applications in bilateral payments, ultimately contributing to enhanced financial efficiency and institutional cooperation.
Source: WAM