First Cross Border Payment Made Using UAE's Digital Dirham.

Maiden Cross Border Digital payment made to China through mBridge Infrastructure
January 30, 2024 by
First Cross Border Payment Made Using UAE's Digital Dirham.
DxTalks, Ibrahim Kazeem

Monday marked a milestone event in Abu Dhabi as Sheikh Mansour Bin Zayed Al Nahyan, the nation's Vice President, Deputy Prime Minister and Chairman of both the Presidential Court and Central Bank's Board of Directors, spearheaded the first cross-border payment using the UAE Central Bank's pioneering digital currency, the 'Digital Dirham'.

Transferring 50 million dirhams directly to China via the 'mBridge' portal, Sheikh Mansour's historic transaction occurred while attending the dual celebration commemorating the Central Bank's 50th anniversary as well as the graduation of the first cohort of 1,056 Emiratis from the 'Ethraa Emiratisation' program at the Abu Dhabi National Exhibition Centre.

Underscoring the leadership's steadfast commitment to solidifying the UAE's stature as a foremost global financial hub, Sheikh Mansour emphasized the Central Bank's integral role in maintaining financial and monetary stability, optimizing efficiency and flexibility across the financial system, and propelling economic growth to further national development efforts.

Sheikh Mansour also highlighted the leadership's dedication to empowering and cultivating Emirati citizens' skills across diverse professional fields and bodies of knowledge.  This ongoing pledge aims to furnish the financial industry with highly qualified national talents aligned with the highest international standards, ultimately contributing to the cultural and developmental renaissance witnessed nationwide.

Congratulating the Central Bank and Emirates Institute of Finance staff in addition to the accomplished graduates of Ethraa's inaugural class, Sheikh Mansour wished them success in serving their country and enabling its continued advancement.

Among other events, Sheikh Mansour was briefed on the Central Bank subsidiaries' 'Innovative Projects' pavilion exhibits created for the occasion.  He also witnessed the launch of Al Etihad Payments company and a project operating the local payment card system, conducting the first successful financial transaction with the distinctive specialty payment card.

Additionally, Sheikh Mansour received information on the services provided by the Aani instant payment platform, introduced by Al Etihad Payments in October 2023, as well as the Suptech supervisory technology project.

What does this mean for the CBDC in the MENA Region?

The UAE's pioneering use of a central bank digital currency (CBDC) for a large cross-border payment has significant implications for broader CBDC adoption across the Middle East and North Africa (MENA). As the first major economy in the region to launch a general purpose CBDC, the UAE is trailblazing financial innovation.

This successful $13 million payment to China exhibits the viability of CBDCs for efficient global settlements. It represents a major milestone that will drive momentum for CBDC experimentation by other MENA central banks and monetary authorities seeking to modernize payment systems. 

Specifically, by demonstrating the functionality of CBDCs in global trade, the test payment dispels doubts about interoperability.

This will accelerate research efforts in countries like Saudi Arabia, Bahrain and Morocco which have already begun exploring CBDCs. If replicated and scaled, the model pioneered by the UAE could potentially transform regional trade and financial cooperation. 

In summary, the UAE's CBDC payment success cements its leadership and provides a template to galvanize broader adoption across MENA.