In cooperation with the central banks of four nations, “the largest pilot” of central bank digital currencies (CBDCs) has been completed, according to the Central Bank of the United Arab Emirates (CBUAE).
The international CBDC trial, according to a Reuters story, was a component of Project mBridge, in which central banks from Thailand, Hong Kong, and China took part. The six-week pilot involved more than 20 commercial banks from the cooperating nations, and more than $21 million in transactions were made during that time.
The CBUAE released a statement saying that “Project mBridge proved faster, more affordable, and secure cross-border monetary settlements utilizing central bank money, highlighted as a G20 economic priority.”
The UAE is juggling virtual currency while working on the prospective launch of a cross-border CBDC and aspires to become the main hub for the asset class. The government announced last week that it was in discussions with numerous digital asset companies about establishing their operations in the nation.
With the Emirate of Dubai luring multinational corporations like Binance and Crypto.com, regional governments in the United Arab Emirates are not leaving all the job to the central government. By declaring that it will aim 40,000 jobs in the metaverse by 2030 and opening a branch of the Ministry of Economy in the metaverse, Dubai has likewise made a significant bid for the metaverse.
Project mCBDC is ready to transform the landscape
The Bank for International Settlements (BIS) Innovation Hub in Hong Kong organized the mCBDC project. The potential it has for the development of CBDCs is highlighted in an official report. The paper discussed the justification for cross-border CBDCs and pointed out that “developing markets tend to bear the brunt of the friction,” with customers potentially paying up to $120 billion in transaction fees annually as a result of the friction.
The report claims that the solution “uses a special shared permissioned blockchain that was built by central banks for central banks.”
Due to the permissioned nature of the decentralized ledger, which enables participating commercial banks to view their own transactions, privacy issues around the use of the mCBDCs were reduced.
