On January 29th, the Central Bank of the United Arab Emirates (UAE) marked a historic milestone by conducting its inaugural cross-border digital dirham transfer through the mBridge central bank digital currency (CBDC) platform.
This momentous event saw the transmission of 50 million dirhams, equivalent to $13.6 million, to China via the cutting-edge multi-CBDC mBridge platform.
Notably, this transfer was personally initiated by Sheikh Mansour, the Chairman of the Board of the Central Bank of the UAE, who seized this occasion to commemorate the golden jubilee celebration of the central bank’s establishment.
The mBridge project, introduced in 2021, represents a pioneering collaboration among the central monetary authorities of China, Hong Kong, Thailand, and the UAE, in partnership with the Bank for International Settlements (BIS).
Remarkably, this initiative stands as the sole international collaborative endeavor involving China. The project achieved a significant milestone in September 2022 when it successfully completed its maiden pilot phase.
The mBridge platform has garnered active participation from multiple commercial banks from each member nation, collectively devoted to enhancing the platform’s infrastructure and technology. Employing a single-platform, direct-access infrastructure coupled with the HotStuff+ consensus mechanism, the mBridge ledger platform facilitates real-time, peer-to-peer transactions.
This breakthrough CBDC platform expedites the transfer of each participant country’s national digital currency.
Even beyond its borders, the mBridge project has attracted attention and scrutiny.
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Representative Maxine Waters, a member of the House Financial Services Committee in the United States, voiced concerns regarding the potential misuse of the project to evade economic penalties.
The rise of blockchain technology and the adoption of digital currencies on distributed ledgers have spurred governments worldwide to explore the creation of national digital currencies issued by their central banks.
An illuminating report from the BIS indicates that nearly 90% of central banks across the globe are actively considering the adoption of CBDCs.
Among these, 11 countries have already launched CBDCs, while 15 are in the pilot phase, and 26 are currently in the development stage, according to data from the CBDC tracker maintained by the Atlantic Council.
In conclusion, the UAE’s central bank has achieved a momentous milestone in cross-border digital currency transfers through the mBridge platform, exemplifying the ongoing global trend toward the adoption of CBDCs.
With the burgeoning interest and investment in this transformative technology, the landscape of international finance is undergoing a profound and irreversible evolution.
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