The Central Bank of the United Arab Emirates (CBUAE) said on Wednesday that it has completed the first and the largest wholesale pilot of central bank digital currencies (CBDC) transactions.
CBUAE said it conducted the six-week pilot project through participation with other regulators, including the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements.
The UAE’s central bank said the pilot test took place on the “project mBridge”, which is a custom-developed distributed ledger technology (DLT) platform developed by the above five regulators (i.e., CBUAE, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements).
Throughout the pilot project, 20 commercial banks in the four jurisdictions used the “mBridge” platform to settle different kinds of payments for corporate customers, focusing on cross-border trade. The commercial banks conducted over 160 cross-border payments and FX (foreign exchange) transactions totalling over Dh80 million ($21.78 million) over six weeks, the report said.
The development marks the first pilot use of wholesale CBDCs in the MENA region under the Project mBridge, as per the announcement.
Khaled Mohamed Balama, Governor of CBUAE, commented, “The mBridge reflects the leadership vision for the UAE to be one of the leaders in CBDC development and issuance and the preferred regional hub for advanced financial infrastructure, as well as for the CBUAE to be among the top central banks globally.”
The test comes as officials in the U.S. are expressing doubts about the country’s willingness to develop its own digital currency.
According to the latest statistics, 109 countries are taking initiatives to create a CBDC. 11 countries have fully launched a digital currency. 14 countries are in the pilot stage with their CBDCs and getting ready for the launch, one of which is the UAE.
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