Project mBridge: Connecting economies through CBDC

Project mBridge: Connecting economies through CBDC

Subject :Economy

Context:

The payment system underpinning cross-border financial flows needs recalibration with the launch of CBDC by various countries.

Details:

Multiple CBDC (multi-CBDC) arrangements that directly connect jurisdictional digital currencies in a single common technical infrastructure offer significant potential to improve the current system and allow cross-border payments to be immediate, cheap and universally accessible with secure settlement.

Project mBridge

• It is a multi-CBDC platform, known as mBridge.
• It  is a joint effort co-led by -The Bank of International Settlement Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Central Bank of the United Arab Emirates .
• A platform based on a new blockchain – the mBridge Ledger – was built by central banks to support real-time, peer-to-peer, cross-border payments and foreign exchange transactions using CBDCs. 
• It also ensures compliance with jurisdiction-specific policy and legal requirements, regulations and governance needs. 
• A pilot involving real corporate transactions centred around international trade was conducted on the platform among participating central banks, selected commercial banks and their customers in four jurisdictions.