The UAE and China have extended their currency swap deal and agreed to work together in the development of digital currencies.

The Central Bank of the UAE and the People’s Bank of China signed on Tuesday a new pact to renew for another five years the currency swap agreement between the two countries, which has a nominal value of AED18 billion ($4.9 billion), the UAE regulator confirmed in a statement.

The renewal seeks to boost financial and trade cooperation between China and the UAE.

The two parties also signed a memorandum of understanding to boost cooperation in the development of central bank digital currencies.

Under the MoU, the two countries will share information on best practices and regulations relating to digital currencies and support the implementation of joint initiatives and projects.

One of the joint initiatives is the “mBridge” project, a multi-central bank digital currencies platform that seeks to facilitate cross-border trade payments instantly.

The UAE is China’s top trade partner in the GCC as of 2021. The value of non-oil trade between the two countries reached AED264.2 billion in 2022, growing by 18% from the previous year.

The Asian state is also the third-largest foreign investor in the UAE, with investments worth $9.3 billion as of the start of 2021, up by more than 500% from 2013, according to the Ministry of Economy.

(Writing by Cleofe Maceda; editing by Seban Scaria)