UAE’s Central Bank Marks 50th Anniversary with Historic CBDC Transaction to China

Celebrating the 50th anniversary of the UAE’s Central Bank in grand style, 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 Central Bank of the UAE (CBUAE), has etched history by initiating the first-ever CBDC cross-border payment transaction to China. Utilizing the cutting-edge Mbridge Blockchain platform, Sheikh Mansour orchestrated a seamless $13.6 million transaction directly to China through the ‘BIS M Bridge’ platform DLT.

This groundbreaking move follows the Memorandum of Understanding (MOU) signed between the Central Bank of the UAE (CBUAE) and the People’s Bank of China to enhance technical and technological cooperation in the development of central bank digital currencies (CBDC). The collaboration extends beyond the initial mBridge CBDC project, reflecting a deepening commitment to fostering innovation in monetary systems.

During a speech delivered by Hong Kong Monetary Authority (HKMA) CEO Eddie Yue in September 2023, significant progress was highlighted regarding the wholesale CBDC project Mbridge. Yue announced the imminent launch of a minimal viable product (MVP), with the participation of key players including the UAE Central Bank, Bank of China, BIS, Bank of Thailand, and new entrants.

Recognizing the need for a robust regulatory framework for central digital currencies, UAE Central Bank officials have advocated for measures to streamline cross-border monetary operations, emphasizing efficiency and cost reduction.

In pursuit of technological excellence, the UAE Central Bank has partnered with R3 as its technology partner for the initial phase of the CBDC project. R3’s permission-based Distributed Ledger Technology (DLT) was selected for its ability to decentralize assets securely, particularly in regulated industries. Its interoperability and asset fluidity further solidify its position as a preferred choice for advancing digital currency initiatives.

In a momentous ceremony, Sheikh Mansour also presided over the graduation of the first batch of 1,056 citizens from the ‘Ethraa’ program. These individuals successfully completed a rigorous training and qualification program at the Emirates Institute of Finance, underscoring the UAE’s commitment to nurturing talent and fostering human capital development.

The ceremony served as a testament to the remarkable journey of progress and development undertaken by the CBUAE over the past 50 years. Through its unwavering dedication to financial and monetary stability, as well as its proactive stance in driving economic growth, the apex bank has cemented its position as a key player in the global financial landscape. Moreover, the launch of innovative projects under the Financial Infrastructure Transformation Program (FIT program) reflects the CBUAE’s steadfast commitment to accelerating digital transformation in the financial services sector, positioning itself among the leading central banks worldwide.