RAKBANK has become one of the first banks in the UAE to successfully execute an international remittance using China's digital Yuan (eCNY) in exchange for the UAE’s Digital Dirham, marking a major moment in the evolution of cross-border payments.
This pioneering transaction showcases the potential of Central Bank Digital Currencies (CBDCs) to revolutionize global financial systems by enabling real-time transfers, enhancing transparency, and reducing transaction costs.
This achievement is part of Project mBridge, an initiative aimed at addressing the inefficiencies of cross-border payments, such as high fees, slow processing times, and operational complexities.
Launched in 2021, mBridge is a collaborative effort involving the Central Bank of the UAE, the BIS Innovation Hub, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China, and the Hong Kong Monetary Authority.
The project leverages a multi-central bank digital currency platform, built on distributed ledger technology (DLT), to facilitate peer-to-peer foreign exchange transactions and cross-border payments.
As for the mBridge Ledger, it is a blockchain-based platform that underpins the system, providing a secure and instant payment mechanism that eliminates the need for traditional intermediaries.
RAKBANK’s Role in the Future of Digital Payments
The successful completion of this transaction highlights RAKBANK’s advanced digital capabilities and positions it as a pioneer in the global financial landscape.
RAKBANK’s Group CEO, Raheel Ahmed, expressed pride in the bank's involvement, stating, “Our participation in the mBridge platform and the execution of this first-ever CBDC international payment showcases our commitment to innovation and solidifies our standing as a leading bank in the UAE with an expanding international payments network.”
Vikas Suri, Co-Head of Wholesale Banking Group at RAKBANK, emphasized the significance of the achievement: “This successful transfer of eCNY to our correspondent in China is a game-changer. It's one of the first UAE-led foreign currency transfers executed without the need for a third currency or traditional payment systems. This paves the way for instant, blockchain-based CBDC exchanges, fundamentally transforming international payments.”
RAKBANK plans to continue developing this capability to support the growing business corridor between China and the UAE, further leveraging blockchain and CBDC technologies to enhance cross-border transactions.
