The multinational CBDC pilot was part of Project mBridge, which uses a platform based on distributed ledger technologies to perform cross-border payments experiments. Project mBridge included the participation of central banks from countries such as China, Thailand, and Hong Kong. Overall, more than 20 commercial banks from the collaborating countries took part in the pilot and recorded USD 21 million in transactions over a six-week period.
Officials from CBUAE cited by coingeek.com highlighted that project mBridge demonstrated faster, cost-effective and secure cross-border monetary settlements using central bank money. Moreover, the same official revealed that the CBDC pilot explored means to enhance the local financial sector in the country.
According to the same source, the UAE is focusing on virtual currency as the local government was recently in talks with several digital asset firms to potentially establish their operations in the country. Dubai has attracted entities such as Binance and Crypto.com and announced that it plans to support 40,000 jobs in the metaverse by 2030.
According to industria.tech, the Arab Monetary Fund (AMF) released a report in January 2022 focusing on 17 Arab central banks, including Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Yemen, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Tunisia, and the Emirates.
The report revealed that 69% of Arab banks were still in the process of determining the type of digital currency they want to issue. Furthermore, 25% were interested in adopting more than one type of digital currency, including wholesale, hybrid, and direct retail CBDCs.
Apart from Project mBridge, another noteworthy experiment involving CBDCs is Project Aber, which involves the Saudi Central Bank (SAMA) and the Central Bank of the United Arab Emirates. The project explores the relationship between different currencies such as the Saudi Riyal and the Emirati Dirham.
According to the same source, other MENA countries looking into CBDC include Egypt and Morocco. In 2021, the Central Bank of Egypt launched a study on the technical and strategic aspects of central banks' digital currencies and their potential impact on the local economy and payment systems.
In the same year, Morocco also established a specialised committee to study the possibility of issuing a digital currency. However, in Morocco’s case, the effort is purely for research purposes as the country has no plans to issue a CBDC in the near future.
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