The initial cross-border digital dirham transfer using the mBridge central bank digital currency (CBDC) platform was successfully conducted by the United Arab Emirates’ (UAE) central bank on January 29th. The transfer, amounting to 50 million dirhams ($13.6 million), was sent to China through the multi-CBDC mBridge platform. Sheikh Mansour, the chairman of the board of the Central Bank of the UAE, performed the CBDC transfer to commemorate the central bank’s golden jubilee celebration.
The mBridge project was launched in 2021 through a collaboration between the central monetary authorities of China, Hong Kong, Thailand, and the UAE, in partnership with the Bank for International Settlement (BIS). It is the only international collaborative initiative that includes China. The project successfully completed its initial pilot phase in September 2022.
To establish the necessary infrastructure and technology, multiple commercial banks from each participating member nation have joined the mBridge platform. The platform utilizes a single-platform, direct-access infrastructure and employs the HotStuff+ consensus mechanism for real-time, peer-to-peer transactions. This allows for faster transfers of each participant country’s national digital currency.
The advancements made by mBridge have garnered attention from various quarters, including Representative Maxine Waters, a member of the House Financial Services Committee in the United States Congress. Waters expressed concerns about the potential use of the project as a means to evade economic penalties.
The growing popularity of blockchain technology and the increasing use of digital currencies on distributed ledgers have prompted governments worldwide to explore the creation of a national digital currency issued by their central banks. According to a report by the BIS, nearly 90% of central banks globally are considering the adoption of CBDCs. Currently, 11 countries have already launched a CBDC, 15 are in the pilot stage, and 26 are in the development phase, as reported by the CBDC tracker from the Atlantic Council.