UAE Central Bank Executes First Cross-Border Digital Dirham Transfer via mBridge Platform
Summary:
The Central Bank of the United Arab Emirates completed its first cross-border digital dirham transfer, using the mBridge Central Bank Digital Currency (CBDC) platform, to China. The operation marked the platform's debut in executing transactions involving other nations. The mBridge platform, introduced by China, Hong Kong, Thailand, and the UAE central authorities in partnership with the Bank of International Settlement, facilitates real-time, peer-to-peer transactions. Concerns have been raised in the US about possible misuses of such technology. As blockchain technology gains traction, an estimated 90% of central banks worldwide show interest in adopting CBDCs.
The United Arab Emirates' (UAE) Central Bank has successfully conducted its maiden cross-border digital dirham transfer. This took place on January 29th via the mBridge Central Bank Digital Currency (CBDC) platform. With a value of 50 million AED ($13.6 million), the first CBDC transfer was sent to China using the mBridge platform, as stated in the Gulf News report. The procedure was carried out by Sheikh Mansour, the Chairman of the UAE Central Bank's Board, marking the golden jubilee of the bank's founding.
Launched by the monetary authorities of China, Hong Kong, Thailand, and the UAE along with the Bank of International Settlement (BIS) in 2021, mBridge is an exclusive international collaboration that is associated with China. Its pilot phase concluded in September 2022, and the platform was officially launched for commercial use a year later, in September 2023.
Commercial banks from each participating country have been incorporated into the mBridge platform to contrubute their resources to the infrastructure and technology. The mBridge Ledger platform uses a single-platform, direct-access infrastructure to facilitate real-time, peer-to-peer transactions through the HotStuff+ consensus mechanism. The platform's infrastructure enables swift transfers of the national digital currencies of each participating country.
In the United States, Congress has been keeping an eye on mBridge's progress. Maxine Waters, who is leading the House Financial Services Committee, expressed concerns regarding the use of the project as a shield to evade economic punishments.
With the increasing prevalence of blockchain technology and digital currencies using the distributed ledger system, global governments have started experimenting with the application of blockchain technology to implement national digital currencies issued by their central banks. Based on a report by the BIS, nearly 90% of central banks around the world are keen to implement CBDCs. According to the Atlantic Council's CBDC tracker, 11 out of these countries have already launched their CBDC, 15 are in the testing phase, and 26 countries are consolidating the development phase for their own CBDC.
Published At
1/30/2024 12:51:51 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.