The UAE Central Bank marked a historic moment on January 29 by executing the first cross-border digital dirham transfer using the mBridge Central Bank Digital Currency (CBDC) platform. Gulf News reported that a substantial AED 50 million ($13.6 million) cross-border CBDC transfer was initiated, reaching China through the multi-CBDC mBridge platform. Sheikh Mansour, Chairman of the Board of Directors of the UAE Central Bank, conducted the CBDC transfer as part of the central bank's golden jubilee celebrations.
The mBridge project, a collaborative effort launched in 2021, involves central monetary authorities from China, Hong Kong, Thailand, and the United Arab Emirates. This initiative, in partnership with the Bank for International Settlements (BIS), represents a unique international collaboration involving China. The mBridge project completed its initial pilot phase in September 2022.
To enhance infrastructure and technology, the mBridge platform has formed partnerships with multiple commercial banks in each participating member state. Leveraging a unified platform and direct access infrastructure, the mBridge ledger platform facilitates real-time, peer-to-peer transactions through the HotStuff+ consensus mechanism. This CBDC platform significantly expedites transfers of each participating country's national digital currency.
The progress of the mBridge project has attracted attention on an international scale. Rep. Maxine Waters, a member of the U.S. House Financial Services Committee, expressed some reservations, indicating concern that the program could potentially be exploited to evade financial penalties. The growing popularity of blockchain technology and the adoption of digital currencies on distributed ledgers have prompted governments worldwide to explore the creation of national digital currencies issued by central banks.
A report by the Bank for International Settlements (BIS) revealed that nearly 90% of central banks globally are actively considering the adoption of Central Bank Digital Currencies (CBDCs). The Atlantic Council's CBDC tracker indicates that 11 countries have already launched CBDCs, 15 are in the pilot phase, and 26 are in the development phase, reflecting the widespread interest and advancement in CBDC initiatives.
