The Central Bank of the UAE (CBUAE) has launched the Minimum Viable Product (MVP) of its mBridge platform, marking a significant step forward in cross-border payments. This collaborative project, involving central banks from Hong Kong, Thailand, and China, alongside the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre, is the world’s first multi-central bank digital currency (CBDC) platform to reach the MVP stage.
Early Success Paves the Way:
In January 2024, a historic first occurred with the UAE initiating a real-value cross-border CBDC payment using mBridge. This AED 50 million transaction, involving the “Digital Dirham,” solidified the project’s potential for the MENA region.
Several UAE-based financial institutions (LFIs) are already onboarded, and efforts are underway to accelerate adoption. These institutions can now facilitate seamless cross-border CBDC payments with counterparts in participating jurisdictions.
Revolutionizing Payments with Phase 1:
The mBridge platform leverages distributed ledger technology (DLT) to offer a faster, more efficient, and cost-effective alternative to traditional cross-border payment systems. This innovative solution aims to streamline international trade and collaboration by enabling instant settlements in central bank money.
Looking Ahead to Domestic Use:
The successful launch of the mBridge MVP represents Phase 1 of the CBUAE’s CBDC strategy. Phase 2 focuses on implementing domestic CBDC payments within the UAE, further enhancing cross-border fund transfers.
Governor of the CBUAE, Khaled Mohamed Balama, highlighted the project’s potential: “Our participation in mBridge reflects our commitment to innovation and efficiency in financial services. This collaboration has the potential to revolutionize global payments, creating a more robust and interconnected infrastructure for all.”
In a move to further solidify the UAE’s position in the digital asset landscape, the Central Bank of the UAE (CBUAE) just yesterday approved a comprehensive system for licensing and overseeing stablecoins. This decision aligns with the CBUAE’s commitment to fostering innovation and financial inclusion within the financial sector.
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