BRICS Milestone: China & UAE Execute First $13M CBDC Transaction

Jonathan Stoker Feb 02, 2024, 23:50pm 208 views

BRICS Milestone: China & UAE Execute First $13M CBDC Transaction

China and UAE Execute Landmark Cross-Border CBDC Transaction

In a significant development for the BRICS alliance, China and the United Arab Emirates (UAE) have successfully finalized the first cross-border Central Bank Digital Currency (CBDC) transaction amounting to over $13 million. The transaction involved the transfer of 50 million dirhams across the mBridge network.

Linking Central Banks via mBridge Network

The mBridge network serves as the conduit that links the central banks of Hong Kong, Thailand, the UAE, and China. Its existence is instrumental in these countries' ongoing efforts for extensive de-dollarization. This progression undoubtedly opens a new pathway to decrease global dependence on the US dollar.

A Glimpse of the Future: Digital Assets and Economic Alliances

Over the past year, BRICS economic alliance has integrated initiatives crucial to its overall growth. The adoption of prevalent de-dollarization plans and expansion for the first time since 2001 are noteworthy developments. These two factors came together in what could be a defining moment for digital assets and the economic alliance.

Details of the Cross-Border CBDC Transaction

This transaction, worth more than $13 million, marks the first real-time payment to ever occur on the mBridge. The mBridge network, which links the central banks of Hong Kong, China, the UAE, and Thailand, was initiated in 2014. Notably, two pivotal payments were made. Saudi Prince Mansour and Chinese ambassador Yiming Zhang jointly set the aforementioned 50 million dirhams, while the Chinese central bank paid a remittance payment in the digital renminbi.

Forthcoming Challenges and Opportunities

Despite its pivotal role, the mBridge network is not fully operational yet. The Bank of International Settlements has pointed out that it's still too early to project a launch date. However, plans are in place for a rollout by mid-2024. This network could pose a significant challenge to the usage of the US dollar worldwide, particularly within BRICS and alliance countries.

Edited by Jonathan Stoker

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