UAE conducts test transactions with central bank digital currencies

According to representatives of the Central Bank, the development of mBridge will facilitate both regional and international trade

27.10.2022 - 11:30

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What’s new? The Central Bank of the United Arab Emirates (CBUAE) has completed testing transactions using central bank digital currencies (CBDCs). The Hong Kong Monetary Authority (HKMA), the Bank of Thailand, the People’s Bank of China, and the Bank for International Settlements (BIS) participated in the pilot launch of the project mBridge. Representatives of the UAE regulator noted that the testing “ demonstrated faster, cost effective and secure cross-border monetary settlements.”

Material by Reuters

Testing details. The mBridge project uses distributed ledger technology (DLT). In the pilot run, commercial banks in four jurisdictions conducted transactions totaling $21,78 million.

Khaled Mohamed Balama, CBUAE’s governor, noted that mBridge is part of the strategy to develop the country’s financial sector in line with trends in the economy. According to the regulator, this development will have a positive impact on regional and international trade.

What happened before? The Middle East and North Africa (MENA) region, which includes the UAE, became a leader in cryptocurrency adoption, according to a study by analytics firm Chainalysis. The volume of transactions in digital assets in the region increased by 48% over the year.

In September, the Ministry of Economy of the United Arab Emirates opened its headquarters in the metaverse. It is a virtual multiple-story building where visitors can sign documents and perform other legally binding operations.

In May, the Virtual Asset Regulatory Authority (VARA) also opened its headquarters in the metaverse, making the UAE the first jurisdiction to enter the virtual space.

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