The Central Bank of the UAE Achieves Milestone with Cross-Border Digital Dirham Transfer
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, marking 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, emphasizing 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 and involves multiple commercial banks from each participating country. In return, the ledger platform facilitates faster transfers of each participating country’s national digital currency.
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, which aims to enhance Emirati representation in the financial sector. As part of the Financial Infrastructure Transformation Programme (FIT), the CBUAE has launched innovative projects to accelerate digital transformation in the financial sector and position itself among the top central banks globally. Sheikh Mansour reiterated the leadership’s commitment to empowering UAE national cadres and strengthening the financial sector.
Hot Take: Growing Trend of CBDC Adoption
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 about its potential misuse. Representative Maxine Waters of the House Financial Services Committee in the United States expressed worries about using the project as a cover for avoiding economic penalties, highlighting the complex intersection of financial technology, geopolitics, and international relations.
The Central Bank of the 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 transferring 50 million digital dirhams ($13.6 million) to China. This achievement marked a historic celebration of the central bank’s 50th anniversary.
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