UAE’s uses CBDC for first cross-border payment to China

The United Arab Emirates (UAE) has settled its first cross-border payment to China using the Central Bank Digital Currency (CBDC). On a historic day for global finance, $13.6 million in Digital Dirham was sent via mBridge’s distributed ledger technology.

For this payment, Sheikh Mansour bin Zayed Al Nahyan sent AED50 million, worth $13.6 million, with the Digital Dirham. In particular, the Digital Dirham was sent through the ‘mBridge’. This distributed ledger technology (DLT) uses CBDCs for international fund transfers between participating banks.

Notably, Sheikh Mansour is also UAE’s Vice President, Deputy Prime Minister, Chairman of the Presidential Court, and Chairman of the Board of the Central Bank of the UAE (CBUAE).

Arabian Business reported this historical moment on January 30, which happened during CBUAE’s 50th Anniversary celebration.

Interestingly, the UAE Dirham (AED) is pegged to the United States Dollar (USD) at the exchange rate of 1 USD equals 3.6725 AED, or 1 AED equals 0.27 USD. Thus, the AED resembles a stablecoin and has low volatility against the leading fiat currency in the Forex market.

UAE’s Central Bank 50th Anniversary

The Central Bank of the UAE marked its 50th Anniversary with a grand ceremony. The event highlighted the bank’s evolution over five decades. It demonstrated CBUAE’s role in enhancing financial and monetary stability. Additionally, the ceremony showcased the bank’s contribution to the UAE’s economic growth.

Sheikh Mansour spoke on the occasion, acknowledging the UAE leadership’s dedication. He emphasized their commitment to uplifting UAE’s status as a financial hub. Sheikh Mansour highlighted CBUAE’s efforts in promoting stable and flexible financial systems.

سعدت بحضور الاحتفال بمناسبة “اليوبيل الذهبي” لتأسيس مصرف الإمارات المركزي وتخريج الدفعة الأولى من المواطنين الملتحقين في “برنامج إثراء” للتوطين..كما أطلقنا مشاريع ابتكارية لتعزيز البنية التحتية المالية وتسريع التحول الرقمي في القطاع المالي في الدولة.. القيادة حريصة على ترسيخ… pic.twitter.com/uUNDmqHrnC

— منصور بن زايد (@HHMansoor) January 29, 2024

Furthermore, Sheikh Mansour noted CBUAE’s role in fostering economic expansion. He stressed the bank’s influence on the nation’s development initiatives. The leadership’s resolve to enhance UAE national cadres was clear, aiming for global best practices.

This ceremony underscored the UAE’s vision to position CBUAE among the world’s leading central banks. The financial sector’s digitization forms a core strategy in this vision. Through these endeavors, the Central Bank fortifies the foundation for future growth. Sheikh Mansour’s speech reflected the UAE’s broader goals for financial leadership globally.

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