UAE makes first digital dirham transfer via mBridge CBDC platform

mBridge is a multi-national collaborative effort on using the CBDC for cross border transactions.

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 first cross-border CBDC transfer was worth 50 million AED ($13.6 million) and was sent to China using the multi-CBDC bridge platform mBridge, reported 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 of International Settlement (BIS). It is the only international collaborative partnership that involves China. The project completed its pilot in September 2022 and was commercially launched a year later in September 2023.

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 makes way for faster transfer of the national digital currency of each participant country.

The United States Congress also took note of mBridge’s advancements. Maxine Waters, the ranking 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.

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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 their CBDC while 15 nations are in a pilot stage and 26 countries are in the development phase, according to the CBDC tracker from the think tank Atlantic Council.