The Digital Dinar: Is Kuwait Going Cashless?

Kuwait was planning to be joining the wave of digital currency, with the new-found Digital Dinar. Recently, digital currencies (also called Central Bank Digital Currencies) are already being explored in 137 countries & currency unions - representing 98% of global GDP. 

Currently, digital tools are used every day in the form of Apple Pay, Tap, STC Pay, and banking apps. For many young entrepreneurs, especially those running small online businesses as well as delivery services, this could simplify lives. Transactions would be quicker, more efficient, and untraceable. 

This plan emerged by CBK in late 2018 entailed plans to introduce a digital currency as part of a broader modernization of banking. Yet, despite initial excitement and strategic planning, the initiative seems to have stalled, with no new plan of action as of 2025. So, what exactly happened?

In 2018, CBK announced a roadmap for the modernization of the national payment infrastructure. Among the beginning chapters of this new payment ecosystem was a CBDC (Central Bank Digital Currency) backed by the Kuwaiti Dinar. 

However, as Kuwait prepared to launch its updated systems, the COVID-19 pandemic hit in early 2020. Like in multiple countries, public health priorities and economic disruption led to a reallocation of resources away from non-essential projects - and the digital dinar’s plans were postponed.Although, they were not abandoned - as of reports in 2020 and 2021. At the same time, the CBK remained active in enhancing the broader digital payment landscape and it launched several upgraded platforms. 

Over the next few years, the CBK transitioned from implementation to observation and analysis. As other countries (particularly China, Nigeria, and the UAE) launched or piloted their own CBDCs, Kuwait adopted a waiting strategy.

In 2023. CBK Governor Basel A. Al-Haroon confirmed that the bank had established a dedicated internal team to evaluate CBDC developments globally. The team underwent tasks including understanding risks to monetary policy transmission, impacts on financial stability and legal as well as regulatory requirements. 

As of mid-20205 there is no pilot project for a Kuwaiti CBDC. However, the CBK has not closed the door on the concept. Its ongoing evaluation of digital currency technologies suggests that the Digital Dinar remains a long-term possibility and not a dead idea. If the digital dinar does return to the limelight, it will likely do so within a regional context, perhaps as part of a GCC-wide initiative.