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 50 million dirhams ($13.6 million) cross-border CBDC transfer was sent to China using the multi-CBDC mBridge platform, according to Gulf News. The chairman of the board of the Central Bank of the UAE, Sheikh Mansour, conducted the CBDC transfer on the occasion of the golden jubilee celebration of the establishment of the central bank.
Project mBridge was introduced in 2021 by the central monetary authorities of China, Hong Kong, Thailand and the UAE in partnership with the Bank for International Settlement (BIS). It is the only international collaborative partnership that involves China. The project completed its first pilot in September 2022.
The mBridge platform has onboarded multiple commercial banks from each participating member nation to work on the infrastructure and technology.
The mBridge ledger platform uses single-platform, direct-access infrastructure to make real-time, peer-to-peer transactions with the HotStuff+ consensus mechanism. The CBDC platform allows faster transfers of each participant country’s national digital currency.
One member of the United States Congress also took note of mBridge’s advancements. Representative Maxine Waters, who is a member of the House Financial Services Committee, voiced her worries about the project’s potential to be used as a cover for avoiding economic penalties.
After the popularity of blockchain technology and the use of digital currencies on the distributed ledger, governments worldwide started exploring the use of blockchain technology to create a national digital currency issued by the central bank.
According to a BIS report, nearly 90% of central banks worldwide are looking to adopt CBDCs. Out of these, 11 countries have launched a CBDC, 15 are in the pilot stage, and 26 are in the development phase, according to the CBDC tracker from the Atlantic Council.