The Central Bank of the UAE (CBUAE) has launched the Minimum Viable Product (MVP) platform of the mBridge project. This initiative is 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.
The mBridge project is a multi-central bank digital currency (CBDC) common platform for wholesale cross-border payments and settlement. It marks the debut of the first multi-CBDC platform to reach the MVP phase, now ready for use by early adopters.
In January 2024, 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 CBUAE, initiated the initial cross-border payment of the ‘Digital Dirham’, the CBUAE’s CBDC, to China worth AED50 million via mBridge. It also signified the first real-value cross-border CBDC payment between a MENA country and a country outside the region on an MVP-ready platform.
The mBridge platform has onboarded several UAE licensed financial institutions (LFIs) to date, and collaborative efforts are in progress to expedite its adoption. Onboarded LFIs are now set to initiate and process cross-border CBDC payments with their counterparts from the participating jurisdictions.
The CBUAE foresees increased utilization of the mBridge platform for cross-border payments among the participating jurisdictions. Continuous evaluations and improvements are also in progress as the platform advances towards a full production launch.
CBUAE Advances Financial Infrastructure with mBridge MVP Launch Under FIT Programme
The mBridge platform stands as a pivotal initiative under the CBUAE’s Financial Infrastructure Transformation (FIT) programme, which aims to hasten the digital transformation of the UAE’s financial services sector. The deployment, testing, and launch of the mBridge MVP form part of the CBUAE’s Phase 1 implementation of its broader CBDC strategy, supported by the utilization of the Digital Dirham. Presently, the CBUAE is strategizing for Phase 2 implementation, encompassing domestic CBDC payments and further enhancements of cross-border fund transfers. Leveraging distributed ledger technology, the mBridge project aims to link economies through a multi-CBDC platform to bolster international trade and cooperation, while surmounting challenges posed by existing cross-border payment systems and offering efficient, low-cost, and instantaneous cross-border payments settled in central bank money.
Khaled Mohamed Balama, Governor of the CBUAE, remarked, “The CBUAE’s participation in mBridge aligns with our strategic objectives of fostering innovation, efficiency, and financial inclusion in the financial services sector. 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.”
