The United Arab Emirates (UAE) has just completed the first cross-border transfer of Central Bank Digital Currency (CBDC) to China, marking a symbolic step towards the de-dollarization of the global economy.
A 50 million dirham digital transfer shakes the dollar
This Monday, January 29, on the 50th anniversary of the Emirati Central Bank, its chairman Sheikh Mansour bin Zayed Al Nahyan has initiated a transfer of 50 million digital dirhams ($13.5 million) to China. The transaction was carried out through mBridge, platform launched in 2021 by the Bank for International Settlements (BIS) with the central banks of China, Hong Kong, Thailand and the United Arab Emirates.
This choice of recipient is no accident. China and the United Arab Emirates are in fact part of the BRICS+ GROUP committed to building an alternative financial system to reduce the dominance of the US dollar. CBDC such as digital dirham, are key instruments in this joint de-dollarization strategy.
The digital dirham, a strategic CBDC!
Technically, the digital dirham is based on blockchain guaranteeing the speed, security and traceability of transactions. Designed by the start-up One Gram in partnership with UAE Central Bank, this CBDC offers a number of advantages.
It facilitates financial inclusion and international trade while at the same time enabling the development of new business models thanks to its programmability.
At this historic event, Sheikh Mansour emphasized how this CBDC was part of the country’s strategic plan to become a leading global financial hub.
The launch of the digital dirham was accompanied by the launch of the of Al Etihad Payments, the future regional reference for payment services, and Suptech, a banking supervision platform using artificial intelligence.
These various projects, combined with programs to train local talent, aim to make the Emirates a world leader in digital finance. They also demonstrate the country’s commitment to an internationally responsible digital transition.
Conclusion about a potential numeric de-dollarization
Through this symbolic transaction, the United Arab Emirates confirm their strategic alliance with China within the BRICS+ movement. This club of emerging countries, led by Beijing and Moscow, aims to offer a credible alternative to the US dollar for international trade and finance.
The successful use of the UAE’s digital dirham for this cross-border transfer technically validates the central role that Central Bank Digital Currencies (CBDC) can play in reshaping the global financial architecture.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.