The Switzerland-based Bank for International Settlements recently announced that Saudi Arabia’s central bank has officially joined the central bank digital currencies (CBDC) project, mBridge. mBridge is a cross-border experiment with (CBDCs) for international trade.
mBridge
Project mBridge was launched in 2021 as a partnership between the BIS’ innovation arm and the Digital Currency Institute of the People’s Bank of China, the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the United Arab Emirates, to test the viability of CBDCs for instantaneous cross-border trade and other payments using the project’s blockchain, the mBridge Ledger.
This project aims to develop a multi-central bank digital currency (CBDC) platform shared among participating central and commercial banks. The project uses distributed ledger technology (DLT) to enable instant cross-border payments and settlement.
The project aims to address key inefficiencies in cross-border payments, such as high costs, low speed, and operational complexities. It also resolves financial inclusion issues, especially in regions where the existing banking infrastructure for connecting countries to the global financial system has declined, leading to additional costs and delays.
The project has a blockchain platform, the mBridge Ledger, that supports real-time, peer-to-peer cross-border payments and foreign exchange transactions. In 2022, a pilot involving real-value transactions was conducted. Since then, the mBridge project team has evaluated whether the prototype platform could evolve into an MVP.
Project mBridge Reaches Minimum Viable Product (MVP)
Also, the BIS announced that Project mBridge has reached the minimum viable product (MVP) stage. They have invited private sector financial firms to “propose new solutions and use cases that help develop the platform and showcase all its potential.”
As Project mBridge entered the MVP stage, it invited private sector firms to propose new solutions and use cases to develop the platform further and demonstrate its full potential. Interested firms can apply to participate via the provided participation form.
Project mBridge Observers
As of June 2024, the observing members of Project mBridge include the International Monetary Fund (IMF), the World Bank, Bangko Sentral ng Pilipinas, the Asian Infrastructure Investment Bank, Bank Indonesia, Bank of France, Bank of Israel, Bank of Italy, Bank of Korea, Bank of Namibia, Central Bank of Bahrain, Central Bank of Chile, Central Bank of Egypt, Central Bank of Jordan, Central Bank of Malaysia, Central Bank of Nepal, Central Bank of Norway, Central Bank of the Republic of Türkiye, European Central Bank, Magyar Nemzeti Bank, National Bank of Cambodia, National Bank of Georgia, National Bank of Kazakhstan, New York Innovation Centre at the Federal Reserve Bank of New York, Reserve Bank of Australia and South African Reserve Bank.
Final Words
Saudi Arabia joining the ongoing project mBridge adds to the list of countries involved in the CBDC project. This helps the countries involved to a means of internation trade processing.
Frequently Asked Questions
What is the CBDC project?
BDCs are digital currencies issued by governments that utilize blockchain or distributed ledger technology.
How many countries have CBDC?
There are at least eleven countries with CBDCs.
Does Nigeria have CBDC?
Yes, Nigeria has a CBDC.
Which African country has a CBDC?
Nigeria is the first African country to have a CBDC.
Which Country has CBDC?
Some of the countries with a CBDC are Nigeria, China, The Bahamas, etc.
Is there CBDC in Africa?
Yes, there is CBDC in Africa.
Does China have a CBDC?
Yes, China has a CBDC.
