UAE’s First Cross-Border Digital Currency Transfer
The United Arab Emirates (UAE) Central Bank has successfully made its first international transfer using digital currency. On January 29, the bank sent 50 million dirhams (equivalent to $13.6 million) to China using the mBridge central bank digital currency (CBDC) platform.
Celebrating Central Bank’s Golden Jubilee with CBDC Transfer
This significant digital transaction was executed by Sheikh Mansour, the chairman of the board of the UAE Central Bank, during the golden jubilee celebration of the central bank’s founding.
About the mBridge Project
Launched in 2021, Project mBridge is a collaboration between the central monetary authorities of China, Hong Kong, Thailand, and the UAE, along with the Bank for International Settlement (BIS). It stands out as the only international project involving China in this domain. After completing its pilot phase in September 2022, the mBridge platform was officially launched for commercial use in September 2023.
Participation in Commercial Banks and Platform Technology
Several commercial banks from each member nation have joined the mBridge platform to contribute to its infrastructure and technology. The platform operates on a single-platform, direct-access infrastructure, enabling real-time, peer-to-peer transactions. It uses the HotStuff+ consensus mechanism and facilitates faster transfers of each participating country’s national digital currency.
Concerns Raised by US Congress Member
U.S. Congresswoman Maxine Waters, a House Financial Services Committee member, has expressed concerns about the mBridge project. She fears that the platform could be used to circumvent economic sanctions.
Global Interest in Blockchain and CBDCs
Following the rise of blockchain technology and digital currencies, governments worldwide have explored blockchain to create national digital currencies issued by central banks. According to a report by the BIS, around 90% of central banks globally are considering adopting CBDCs. Currently, 11 countries have already launched a CBDC, 15 are testing them in pilot programs, and 26 are in the development stage, per the CBDC tracker from the Atlantic Council.
