UAE Central Bank Completes First Cross-Border Digital Dirham Transfer via mBridge

BySamson Ononeme

Jan 30, 2024 , ,
The UAE sent 50 million digital dirhams worth $13.6 million to China using the trailblazing mBridge centralized bank digital currency platform on the occasion of UAE central bank's 50th anniversary.

Key Insights

  • Central Bank of the UAE conducts first cross-border digital dirham transfer using mBridge CBDC platform
  • $13.6 million dirham sent to China via mBridge to mark 50 years since establishment of UAE central bank
  • mBridge project facilitated by BIS launched in 2021 between China, Hong Kong, Thailand and UAE central banks

DUBAI (MarketsXplora) – The Central Bank of the United Arab Emirates (CBUAE) has conducted its inaugural cross-border funds transfer using digital dirham currency over the mBridge central bank digital currency (CBDC) platform.

CBUAE governor Sheikh Mansour bin Zayed Al Nahyan executed a 50 million dirham ($13.6 million) dirham transfer to China on Sunday, commemorating the UAE central bank’s 50th anniversary, state news agency WAM reported.

The transaction utilised mBridge, a joint CBDC project between China, Thailand, Hong Kong and the UAE in partnership with the Bank for International Settlements (BIS).

First piloted in 2022, the platform connects participating central banks through direct linkages between their domestic digital payment systems, enabling real-time settled cross-border transfers.

It relies on distributed ledger technology and allows each jurisdiction’s CBDC to remain under its owner’s account.

U.S. lawmaker Maxine Waters recently voiced concerns mBridge may help countries evade economic sanctions via its decentralised design.

Globally, some 90% of central banks are now exploring CBDCs, up from 65% in 2022, the BIS said in a recent report.

The UAE dirham marks the second currency to go live for international settlements on mBridge after Thailand’s digital baht.

CBUAE said it remains focused on continuous developments in financial infrastructure, in collaboration with peers overseas.

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