The Central Bank of the United Arab Emirates (UAE) achieved a significant milestone by conducting its inaugural cross-border digital dirham transfer using the mBridge central bank digital currency (CBDC) platform on January 29.
The transaction involved the transfer of 50 million digital dirhams (equivalent to $13.6 million) to China. It was executed by Sheikh Mansour, the Chairman of the Board of the Central Bank of the UAE. The transfer marked a historic celebration of the central bank’s 50th anniversary.
mBridge Facilitates Landmark Cross-Border Digital Dirham CBDC Transfer to China
The ceremony highlighted the progress and development journey of the CBUAE over 50 years. It emphasized its role in strengthening financial and monetary stability, fostering economic growth, and contributing to the digital transformation of the financial services sector.
Project mBridge utilizes a single-platform, direct-access infrastructure for real-time, peer-to-peer transactions. The platform employs the HotStuff+ consensus mechanism. mBridge involves multiple commercial banks from each participating country, contributing to infrastructure and technology development. In return, the ledger platform facilitates faster transfers of each participating country’s national digital currency.
1/Central Bank of the UAE, marked a significant moment on Monday by initiating the first cross-border payment using the UAE Central Bank’s digital currency, ‘Digital Dirham’, amounting to Dh500 million.transaction sent directly to China through the ‘BIS M Bridge’ platform DLT pic.twitter.com/6dVMIM8WE3
— {X}-XRPLcitizen (@XRPLCitizen) January 29, 2024
The mBridge platform, initiated in 2021 through collaboration between the central monetary authorities of China, Hong Kong, Thailand, and the UAE in partnership with the Bank for International Settlements (BIS), enables multi-central bank digital currency transactions. It completed its pilot phase in September 2022 and was commercially launched in September 2023.
As governments worldwide explore the integration of blockchain technology for national digital currencies, the mBridge project exemplifies the growing trend. According to a report by the Bank for International Settlements (BIS), nearly 90% of central banks globally are considering the adoption of CBDCs. Of these, 11 countries have already launched CBDCs, 15 are in the pilot stage, and 26 are in the development phase, as indicated by the CBDC tracker from the Atlantic Council.
While mBridge’s advancements have drawn positive attention, concerns have been raised, notably by Representative Maxine Waters of the House Financial Services Committee in the United States. Waters expressed worries about the potential misuse of the project as a cover for avoiding economic penalties, shedding light on the complex intersection of financial technology, geopolitics, and international relations.
CBUAE’s Commitment to Financial Transformation
During the event, Sheikh Mansour also witnessed the graduation of the first batch of 1,056 male and female citizens from the “Ethraa” program. The program aims to enhance Emirati representation in the financial sector by equipping citizens with advanced skills and qualifications through training at the Emirates Institute of Finance.
As part of the Financial Infrastructure Transformation Programme (FIT), the CBUAE has launched innovative projects to accelerate digital transformation in the financial sector, aligning with its strategy to position itself among the top central banks globally.
Sheikh Mansour reiterated the leadership’s commitment to empowering UAE national cadres, stating that qualified professionals with diverse skills and knowledge would strengthen the financial sector and contribute to the nation’s progress.
The event also featured the “Aani” instant payment platform, launched by Al Etihad Payments in October 2023, and the introduction of “Open Finance,” enabling consumers to connect and share data across the entire financial ecosystem. Additionally, the visual identity of the Ombudsman Unit, named “Sanadak” (Arabic for “Your Support”), was launched during the ceremony. Sanadak is the first independent unit for settling banking and insurance disputes in the Middle East and North Africa.
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