The central bank of the United Arab Emirates (UAE) conducted its first cross-border digital dirham transfer using the mBridge central bank digital currency (CBDC) platform on Jan. 29. The first cross-border CBDC transfer was worth 50 million AED ($13.6 million) and was sent to China using the multi-CBDC bridge platform mBridge, reported Gulf news.
The transfer was executed by Sheikh Mansour, the Chairman of the Board of the Central Bank of the UAE, on the occasion of the golden jubilee celebration of the establishment of the central bank. The ceremony highlighted the progress and development journey of the CBUAE over 50 years, and its role in fostering financial and monetary stability, economic growth, and digital transformation of the financial services sector.
The mBridge platform enables multi-central bank digital currency transactions
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.
The mBridge platform 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. The ledger platform facilitates faster transfers of each participating country’s national digital currency.
The UAE is among the leading countries in CBDC adoption
The UAE is among the leading countries in CBDC adoption, as it aims to become one of the most advanced digital economies in the world. The UAE launched its digital dirham project in October 2021, in collaboration with JP Morgan and ConsenSys. The project aims to create a digital version of the UAE’s fiat currency, the dirham, that can be used for payments, remittances, and trade.
The UAE is also part of the Aber project, a joint initiative with Saudi Arabia to explore the feasibility of a dual-issued CBDC for cross-border payments between the two countries. The project was launched in 2019 and concluded in 2021, with positive results and recommendations for further development.
The UAE’s first cross-border digital dirham transfer using the mBridge platform demonstrates its commitment and readiness to embrace the CBDC revolution, and to enhance its financial inclusion, innovation, and efficiency.