The Central Bank of the UAE (CBUAE) together with the Bank for International Settlements Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, and the Digital Currency Institute of the People’s Bank of China, have launched the Minimum Viable Product (MVP) platform of the mBridge project – a multi-central bank digital currency (CBDC) common platform for wholesale cross-border payments and settlement. This is the first multi-CBDC platform which has reached the MVP phase, ready for use by early adopters.
In January 2024, His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Court and Chairman of the Board of the CBUAE, initiated the first cross-border payment of 'Digital Dirham', the CBUAE’s CBDC, to China worth AED50 million through mBridge. It also marked the first real-value cross-border CBDC payment between a MENA country and a country outside the region on an MVP-ready platform.
Several UAE licensed financial institutions are now on the mBridge platform, ready for cross-border CBDC payments with participating jurisdictions. Collaborative efforts aim to boost its adoption. The CBUAE expects increased platform use, with ongoing enhancements toward a full launch.
The mBridge platform is a key initiative under the CBUAE’s Financial Infrastructure Transformation (FIT) programme which seeks to accelerate the digital transformation of the UAE’s financial services sector. The deployment, testing and launch of the mBridge MVP comes as part of the CBUAE’s Phase 1 implementation of its broader CBDC strategy, supported by the use of the Digital Dirham. Presently, the CBUAE is planning for Phase 2 implementation, which includes domestic CBDC payments and further enhancements of cross-border fund transfers. Utilising distributed ledger technology, the mBridge project aims to connect economies through a multi-CBDC platform to help support international trade and cooperation, whilst overcoming challenges of existing cross-border payment systems and offering efficient, low-cost, and instant cross-border payments settled in central bank money.
Khaled Mohamed Balama, Governor of the CBUAE, said,
“The CBUAE's participation in mBridge aligns with our strategic objectives of promoting innovation, efficiency, and financial inclusion in the financial services sector. By collaborating with our international partners, we aim to contribute to the development of a more robust, efficient, economical, interconnected and instant global payments infrastructure that benefits all participants, while maintaining the highest security standards."
News Source: Emirates News Agency
