Key takeaways:
- The UAE central bank used the mBridge CBDC technology to execute its first cross-border digital dirham transfer.
- Several commercial banks from each participating member country have joined the mBridge platform to collaborate on the technology and infrastructure.
On January 29, the United Arab Emirates (UAE) central bank used the mBridge central bank digital currency (CBDC) technology to execute its first cross-border digital dirham transfer.
The multi-CBDC mBridge platform was used to send the 50 million dirhams ($13.6 million) cross-border CBDC transfer to China, as reported by Gulf News.
On the occasion of the central bank’s golden jubilee commemoration of its founding, Sheikh Mansour, the chairman of the board of the Central Bank of the United Arab Emirates, oversaw the CBDC transfer.
In 2021, the Bank for International Settlement (BIS) and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates launched Project mBridge. It is the sole joint venture between China and other countries. In September 2022, the project’s first pilot program was concluded.
Several commercial banks from each participating member country have joined the mBridge platform to collaborate on the technology and infrastructure.
The mBridge ledger platform employs the HotStuff+ consensus mechanism to provide instantaneous, peer-to-peer transactions using a single-platform, direct-access architecture. The national digital currency of each participating country can be transferred more quickly thanks to the CBDC platform.
A US Congressman was also aware of mBridge’s breakthroughs. Representative Maxine Waters, a member of the House Financial Services Committee, expressed concerns regarding the possibility that the project may be used as a pretext to avoid facing financial penalties.
Following the widespread use of distributed ledger technology and blockchain technology, governments around the world began investigating the possibility of utilizing blockchain technology to establish a central bank-issued national digital currency.
A BIS research states that about 90% of central banks globally are considering using CBDCs. According to the CBDC tracker maintained by the Atlantic Council, among these, 11 have initiated a CBDC, 15 are in the pilot stage, and 26 are in the development phase.
