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  • Writer's pictureTeresa Pace

The United Arab Emirates conducts its initial digital dirham transfer using the mBridge CBDC platform.

Updated: Jan 31

The mBridge platform, a collaborative initiative involving multiple nations, utilizes central bank digital currencies (CBDCs) for facilitating cross-border transactions. On January 29, the Central Bank of the United Arab Emirates (UAE) conducted its inaugural cross-border digital dirham transfer through the mBridge CBDC platform.

The cross-border CBDC transfer amounted to 50 million dirhams ($13.6 million) and was sent to China via the multi-CBDC mBridge platform, as reported by Gulf News. Sheikh Mansour, the Chairman of the board of the Central Bank of the UAE, executed the CBDC transfer in commemoration of the golden jubilee celebration of the central bank's establishment.

Project mBridge was introduced in 2021 by the central monetary authorities of China, Hong Kong, Thailand, and the UAE in collaboration with the Bank for International Settlements (BIS). It stands as the sole international collaborative initiative involving China. The project successfully completed its initial pilot phase in September 2022.

The mBridge platform has enlisted the participation of multiple commercial banks from each contributing member nation to collaborate on infrastructure and technology. Leveraging the HotStuff+ consensus mechanism, the mBridge ledger platform employs a single-platform, direct-access infrastructure for real-time, peer-to-peer transactions. This CBDC platform facilitates swifter transfers of each participating country's national digital currency.

The advancements of mBridge have also garnered attention from global political figures. Representative Maxine Waters, a member of the House Financial Services Committee in the United States, expressed concerns about the project potentially being exploited to evade economic penalties.

Governments worldwide have been exploring the use of blockchain technology to issue national digital currencies through their central banks, particularly after the widespread adoption of blockchain and digital currencies on distributed ledgers. According to a report from 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, according to the CBDC tracker from the Atlantic Council.

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