First non US dollar transaction between BRICS nations: UAE and China trade

The United Arab Emirates indeed completed its first cross-border payment using the Digital Dirham, amounting to AED50 million (approximately $13.6 million), sent to China. This transaction was facilitated through the “mBridge” platform, a collaboration among several central banks and observing members, aimed at transforming wholesale cross-border payments using a multi-central bank digital currency (multi-CBDC) common platform based on distributed ledger technology (DLT). The event marked a significant milestone in the UAE’s efforts to become a global financial hub and its push towards de-dollarization by utilizing digital currency for international trade settlements. This first-ever transaction made directly to China from the UAE using the Digital Dirham was highlighted as a strategic move to reduce reliance on the US dollar. Furthermore, the initiative is part of the broader efforts by BRICS countries, which include the UAE and China, to encourage the use of local currencies for trade settlements, thereby challenging the dominance of the US dollar in international trade. Moreover, the transaction coincides with the UAE Central Bank’s 50th anniversary, reflecting the nation’s commitment to enhancing its status as a financial hub and its dedication to financial and economic development. This move aligns with the UAE’s broader goals of financial leadership globally and emphasizes the significant role digital currencies and technology are playing in shaping the future of global finance. This transaction signifies a step forward in the global shift towards digital currencies and could have implications for the use of the US dollar in international trade, particularly among countries looking to diversify their trade settlement options and reduce their dependence on traditional fiat currencies like the USD. Before we dive deeper, would you mind showing some love by hitting the like button? It really helps us reach more amazing viewers like you. A huge thank you for your support!