Inside The Middle East 29 9 2026 Dr Wael Badawy

Overview

The episode discusses mBridge, a proposed/ongoing cross-border digital payments project that links multiple countries using central bank digital currencies (CBDCs). Transfers are described as instant, supported by a distributed ledger with “high-tech” encryption and ledger infrastructure.

Main arguments and key points

Technological leap in payments

Dr. Wael Badawy frames mBridge as a genuine shift from “message-based” transfers (with delays—historically linked to systems like SWIFT) toward direct settlement with no multi-day waiting period. He argues this reduces opportunities for fraud or hacking that can be enabled by such delays.

Impact on Gulf financial relationships

The involvement of UAE and Saudi Arabia is presented as evidence that Gulf states are accelerating digital transformation, alongside earlier investments in areas such as AI and cybersecurity. Their participation is characterized as leadership and a competitive step toward faster, modern financial infrastructure.

Faster trade and remittances

Badawy emphasizes that instantaneous transfers could speed up:

• Trade settlement by removing 2–3 day delays
• Remittances from foreign workers to relatives, allowing quicker transfers and more efficient currency exchange

Potential to reduce reliance on traditional dollar-based mechanisms

While he does not claim mBridge fully replaces the dollar immediately, the discussion suggests it could serve as an alternative “rail” for cross-border payments—especially relevant for trade with China and the Far East. He also connects this to the idea of a potential “second system” alongside existing global payment infrastructure.

Governance, monitoring, and privacy/control challenges

A central concern is who controls rules and governance within a decentralized distributed ledger environment. He argues decentralization limits centralized monitoring because participants exchange and validate transfers through codes/assets.

Sanctions enforcement, transparency, and AML/CFT compliance

The episode highlights complex issues mBridge-style systems must address, including:

• Sanctions enforcement
• Financial transparency
• Anti-money laundering (AML) / counter-terror financing (CFT)

Badawy suggests possible solutions such as an agent, consortium, or audit body to verify ledger activity. However, he stresses these mechanisms become more difficult when transactions are harder to trace back to individuals.

Practical limits of early-stage trials

He notes the program is currently constrained in scale—mentioning up to ~$22 million equivalent and limited participating banks/bodies—implying broader expansion will require stronger auditing and compliance frameworks.

Long-term direction: digital currencies and tokenization

Over the next 5–10 years, Badawy predicts a move away from cash and banknotes toward digital currency and tokenized assets. He also references examples such as digital wallets used for everyday purchases (including mention of Egypt).

Presenters / contributors

• Angie Maher (host)
• Dr. Wael Badawy (Professor of Digital Transformation)