Central Bank of UAE launches multi-CBDC platform for cross-border payments

The Central Bank of the United Arab Emirates (CBUAE) has launched the minimum viable product (MVP) of the mBridge project, the world’s first multi-central bank digital currency (CBDC) platform for cross-border payments and settlement.

The platform, developed in collaboration 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, represents a significant step forward in streamlining international financial transactions.

“The CBUAE’s participation in mBridge aligns with our strategic objectives of promoting innovation, efficiency, and financial inclusion in the financial services sector,” said Khaled Mohamed Balama, Governor of the CBUAE. “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.”

The new platform uses CBDC

The mBridge platform facilitates real-time, cost-effective cross-border payments using CBDCs, the digital form of a country’s national currency.

In January, a successful pilot transaction saw the UAE’s “Digital Dirham” being used for a cross-border payment to China, marking the first such transaction between a MENA country and a country outside the region on an MVP platform.

Read: Landmark Digital Dirham payment to China marks CBUAE’s 50th anniversary

The #CentralBankUAE 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)…

— Central Bank of the UAE (@centralbankuae) June 5, 2024

Several UAE financial institutions have already been onboarded onto the mBridge platform, allowing them to initiate and process cross-border CBDC payments with their counterparts in participating jurisdictions.

The CBUAE expects the platform’s usage to grow as it progresses towards a full production launch.

The mBridge project is a key initiative under the CBUAE’s Financial Infrastructure Transformation (FIT) programme, which aims to modernise the UAE’s financial sector. This launch marks Phase 1 of the CBUAE’s broader CBDC strategy, with Phase 2 focusing on domestic CBDC payments and further enhancing cross-border fund transfers.

Utilising blockchain technology, the mBridge project seeks to connect economies and support international trade by overcoming limitations of existing cross-border payment systems. It offers the potential for efficient, low-cost, and instant cross-border settlements using central bank digital currencies.