Project mBridge Advances Cross-Border Payments with MVP Launch
Project mBridge, a multi-central bank digital currency (CBDC) initiative, has reached a significant milestone by achieving the Minimum Viable Product (MVP) stage. This project, led by the BIS Innovation Hub and central banks from China, Hong Kong, Thailand, and the UAE, aims to revolutionize cross-border payments through the use of distributed ledger technology (DLT). With the recent inclusion of the Saudi Central Bank as a full participant and over 26 observing members, mBridge continues to expand its international reach and invite private sector collaboration.
Project mBridge seeks to address critical inefficiencies in the current cross-border payment systems, such as high costs, slow transaction speeds, and operational complexities. These challenges are particularly pronounced in jurisdictions where correspondent banking has diminished, leading to increased costs and delays. By leveraging a multi-CBDC platform, mBridge aims to provide a universally accessible, efficient, and cost-effective solution for cross-border payments.
The mBridge Ledger, a new blockchain developed for the project, supports real-time, peer-to-peer, cross-border payments and foreign exchange transactions. During a pilot phase in 2022, the platform processed real-value transactions, demonstrating its potential to enhance the speed and transparency of cross-border payments.
The MVP stage is a result of extensive collaboration among the founding central banks and monetary authorities. Each participant has deployed a validating node within their jurisdiction, ensuring the platform’s decentralized and secure nature. Additionally, commercial banks have conducted real-value transactions to prepare for the MVP release.
To support the unique decentralized nature of the platform, a comprehensive governance and legal framework has been developed. This includes an operational rulebook designed to guide the platform’s use and ensure compliance with jurisdictional regulations. The MVP platform’s compatibility with the Ethereum Virtual Machine further enhances its versatility, enabling interoperability with other platforms and facilitating the integration of add-on technology solutions.
As Project mBridge enters the MVP stage, the BIS is inviting private sector firms to propose value-added solutions and use cases. This collaboration aims to further develop the platform and showcase its potential in real-world applications.
The involvement of the private sector is seen as crucial for the continued development and enhancement of the mBridge platform. By incorporating innovative solutions from private firms, mBridge can expand its functionality and address a broader range of use cases, ultimately driving the adoption of CBDCs in cross-border payments.
