The National Bank of Ras Al Khaimah, also known as Rakbank, has become one of the first banks in the United Arab Emirates to successfully execute an international remittance using China’s digital Yuan (eCNY) in exchange for the Digital Dirham, the UAE’s CBDC.
The announcement comes as countries all over the world study and test the launch of central bank digital currencies (CBDCs) because of their transformative potential in revolutionizing cross-border payments in real-time with enhanced transparency and reduced costs.
According to the firm, RAKBANK is now one of the first banks globally to be part of a live CBDC platform and is ready to transact.
mBridge, a DLT-powered multi-central bank digital currency platform
The live trade of eCNY against the digital Dirham took place as part of Project mBridge, an initiative aimed at addressing inefficiencies in cross-border payments by developing a multi-central bank digital currency platform, built on distributed ledger technology (DLT).
Launched in 2021, mBridge is a collaborative effort between the Central Bank of the United Arab Emirates (CBUAE), 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.
mBridge allows participating central and commercial banks to conduct real-time, peer-to-peer cross-border payments and foreign exchange transactions. The mBridge Ledger, a new blockchain, underpins the platform, supporting secure and instantaneous transactions.
“A game-changer in several respects”
Raheel Ahmed, Group CEO of RAKBANK, said: “The participation of RAKBANK in the mBridge platform and the execution of our first-ever central bank digital currency international payment highlight RAKBANK’s cutting-edge digital capabilities. This milestone reflects our commitment to breaking boundaries and solidifying our position as a leading retail and commercial bank in the UAE, with a rapidly expanding international payments arm”.
Vikas Suri, Co-Head of Wholesale Banking Group at RAKBANK, commented: “The successful transfer of eCNY to our correspondent in China is a game-changer in several respects. It’s one of the first UAE-led foreign currency transfers executed in local currencies without involving a third currency to China and without using conventional payment rails. This is a gamechanger that paves the way for instant blockchain based CBDC exchanges with payment versus payment, fundamentally altering how we approach international payments. Our next steps will focus on supporting the China and UAE business corridor for our clients, by leveraging mBridge to reduce costs and improve the speed of remittances.”
Rakbank partnered with Bitpanda for digital asset infrastructure
Rankbank recently tapped Bitpanda Technology Solutions (BTS) to provide a robust platform for managing digital assets in the United Arab Emirates. BTS is a leading digital assets infrastructure provider that recently entered the Middle East and North Africa region by opening offices in Dubai and launching Bitpanda MENA.
Bitpanda MENA opened its first office in Dubai at the DMCC Crypto Centre and has already appointed an experienced team led by Walid Benothman to tailor its offering to the local market. In line with its long history of regulatory compliance, Bitpanda is in the final stages of obtaining its FSP and will continue to work with local regulators to ensure a fully compliant product offering.
BTS allows its partners to integrate a modular and scaled 24/7 trading infrastructure and offer trading, investing, and custody services across every asset class in a modular way. Partners can build their own user experiences on an ISO 27001-certified and battle-proofed infrastructure including features such as savings plans, asset-to-asset swaps, and crypto staking functionality. Additionally, all of Bitpanda’s European licenses and regulatory experience can be accessed through a partnership with the most comprehensive and regulated crypto platform in Europe.
When fully launched, RAKBANK customers will be able to pursue various digital assets use cases, and settle with payment tokens safely and securely, unlocking one of the most complete offerings available in the UAE market. This is however subject to CBUAE approval.
The provision of services is contingent upon Bitpanda Broker MENA DMCC receiving operational approval and a license from VARA, as well as RAKBANK obtaining the necessary approval from the CBUAE.
