The United Arab Emirates (UAE) has successfully completed the first cross-border payment using the Digital Dirham.
This historic transaction of AED50 million ($13.6 million) was sent by Sheikh Mansour bin Zayed Al Nahyan, chairman of the board of the Central Bank of the UAE, to China.
The cross-border payment was facilitated through the “mBridge” platform, a collaborative effort of the BIS Innovation Hub, four founding central banks including the Hong Kong Monetary Authority, Central Bank of the United Arab Emirates, Digital Currency Institute of the People’s Bank of China and Bank of Thailand, and over 25 observing members.
The program aims to transform wholesale cross-border payments using a multiple-central bank digital currency (multi-CBDC) common platform underpinned by distributed ledger technology (DLT).
The project seeks to address inefficiencies such as high costs, low speed and transparency, and operational complexities, while safeguarding currency sovereignty and monetary and financial stability for each participating jurisdiction.
This comes as the First Abu Dhabi Bank successfully completed a pilot with JPMorgan’s Onyx blockchain for cross-border payments. China has also made large strides in the development of its e-CNY CDBC, such as completing the first cross-border oil transaction, and first cross-border settlement for precious metals. However, in the United States, presidential candidates like Donald Trump, Ron DeSantis and Robert F. Kennedy Jr. have all strongly opposed CBDCs, even vowing to ban them if elected. Ron DeSantis dropped out of the presidential race earlier in January.
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