The UAE's central bank successfully executed its inaugural cross-border transaction in digital dirhams via the mBridge central bank digital currency (CBDC) platform on January 29. This transfer, amounting to 50 million dirhams ($13.6 million), was sent to China, showcasing the capabilities of the multi-CBDC mBridge platform, as reported by Gulf News.

Sheikh Mansour, chairman of the UAE Central Bank's board, facilitated this transfer during the golden jubilee celebration of the bank's founding. Initiated in 2021 by the central banks of China, Hong Kong, Thailand, and the UAE, alongside the Bank for International Settlements (BIS), Project mBridge represents a unique international collaboration that includes China. Its first pilot was successfully completed in September 2022.

The mBridge initiative has attracted several commercial banks from the participating countries to contribute to its infrastructure and technological framework. The platform employs a single-platform, direct-access model for real-time, peer-to-peer transactions, utilizing the HotStuff+ consensus mechanism. This setup enables quicker transactions in the national digital currencies of the member countries.

The project has even caught the attention of U.S. lawmakers, with Representative Maxine Waters of the House Financial Services Committee expressing concerns over the potential misuse of the platform to circumvent economic sanctions.

The rise of blockchain technology and digital currencies has prompted governments globally to explore the creation of national digital currencies managed by central banks. A report from the BIS indicates that nearly 90% of central banks worldwide are considering adopting CBDCs, with 11 countries having already launched theirs, 15 in the pilot stage, and 26 in development, according to the Atlantic Council's CBDC tracker.

Cointelegraph