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Project mBridge Reaches MVP Stage, Expands International Participation

Project mBridge, a collaborative initiative involving multiple central banks and the Bank for International Settlements’ (BIS), has reached an important development milestone.

This project aims to create a multi-central bank digital currency (CBDC) platform for instant cross-border payments and settlements, leveraging distributed ledger technology (DLT). The platform now invites further international participation and private sector proposals for value-added solutions.

Since its inception in 2021, Project mBridge has involved the Bank of Thailand, the Central Bank of the UAE, the Digital Currency Institute of the People’s Bank of China, and the Hong Kong Monetary Authority. The Saudi Central Bank (SAMA) has recently joined as a full participant, with over 26 other central banks observing.

The initiative seeks to address inefficiencies in cross-border payments, such as high costs, low speed, and operational complexities, while promoting financial inclusion.

In January 2024, the UAE conducted the first cross-border payment using its CBDC, the ‘Digital Dirham,’ to China, marking the first real-value CBDC payment between a MENA country and a non-MENA country on the mBridge platform.

Several commercial banks have already started using the mBridge platform to facilitate cross-border CBDC payments among participating jurisdictions. The platform supports real-time, peer-to-peer transactions and foreign exchange operations, using the mBridge Ledger, a new blockchain infrastructure. In 2022, a pilot involving real-value transactions demonstrated the platform’s capabilities.

The platform now includes a governance and legal framework, tailored to its decentralised nature, enabling real-value transactions and compatibility with the Ethereum Virtual Machine. This allows it to serve as a testbed for additional technology solutions and interoperability with other platforms.

MVP

The project has now reached the minimum viable product (MVP) stage, making the platform functional and ready for use by early adopters. This stage allows for real-world testing and feedback to improve and refine the system before a full-scale launch.

His Excellency Khaled Mohamed Balama, governor of the Central Bank of the UAE, emphasised the strategic importance of mBridge, stating: “By collaborating with our international partners, we aim to develop a robust, efficient, and interconnected global payments infrastructure that benefits all participants while maintaining the highest security standards.”

According to SAMA, it has joined the project as part of its “pursuit to build a robust and innovative cross-border payments infrastructure in collaboration with various international financial institutions and central banks”.

It also stated: “SAMA has been investigating the potential of wholesale CBDC, through the analysis of policy-related issues, to evaluate the feasibility of using wholesale CBDC to boost the effectiveness of cross-border payment and settlement between commercial banks.”

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