Fintech
mBridge Project Reaches MVP Phase and Expands International Participation
mBridge projecta collaborative initiative involving multiple central banks and the Bank for International Settlements (BIS), Has it has reached an important development milestone.
This project aims to create a multi-central bank (CBDC) digital currency 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, the mBridge project has involved the Bank of Thailand, Central Bank of the United Arab Emirates, Digital Currency Institute of the People’s Bank of China, and the Hong Kong Monetary Authority. THE Saudi Central Bank (SAMA) recently joined as a full participant, with over 26 other central banks observing.
The initiative aims 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 made 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 mBridge platform facilitate cross-border CBDC payments between participating jurisdictions. The platform supports real-time peer-to-peer transactions and foreign exchange operations, using mBridge Ledger, a new blockchain infrastructure. In 2022, a pilot project involving real-value transactions demonstrated the platform’s capabilities.
The platform now includes a governance and legal framework, adapted to its decentralized nature, enabling real-value transactions and compatibility with the Ethereum virtual machine. This allows it to serve as a testbed for further technological 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 phase allows for real-world testing and feedback to improve and refine the system before a full-scale launch.
His Excellency Khaled Mohamed Balamagovernor of the Central Bank of the United Arab Emirates, underlined the strategic importance of mBridge, stating: “Collaborating with our international partners, we aim to develop a robust, efficient and interconnected global payments infrastructure that benefits all participants while maintaining the maximum safety standard”.
According to SAMA, it joined the project as part of its “pursuit of building a robust and innovative cross-border payments infrastructure in collaboration with various international financial institutions and central banks.”
It further states: “SAMA has been studying the potential of wholesale CBDCs, through the analysis of policy issues, to assess the feasibility of using wholesale CBDCs to increase the effectiveness of cross-border payments and settlements between commercial banks.”