Project mBridge is an ongoing initiative that aims to create a multi-CBDC platform for wholesale cross-border payments. The project addresses the inefficiencies of cross-border payments, including high costs, slow speed, lack of transparency, and operational complexities. The platform is built on distributed ledger technology (DLT) and supported by a comprehensive legal rulebook and governance structure. The project is a collaboration between the BIS Innovation Hub, four founding central banks, and over 25 observing members. The founding central banks include the Hong Kong Monetary Authority, Central Bank of the United Arab Emirates, Digital Currency Institute of the People’s Bank of China, and Bank of Thailand. The observing members consist of various central banks, including the European Central Bank and the Federal Reserve Bank of New York, as well as organizations like the International Monetary Fund and The World Bank.
The current global network of correspondent banks that facilitates international payments is hindered by high costs, low speed, lack of transparency, and operational complexities. Project mBridge aims to address these issues by reducing the number of steps involved in cross-border payments. It enables direct, bilateral connectivity between the payee’s and payer’s local banks, with interoperability with participants’ domestic payment systems. The project believes that multi-CBDC arrangements, which connect the CBDCs of different jurisdictions in a common technical infrastructure, have the potential to significantly improve the current system. This can lead to immediate, cheap, and universally accessible cross-border payments with final settlement.
The mBridge Ledger, a new blockchain, has been developed by central banks to support real-time, peer-to-peer cross-border payments and foreign exchange transactions using CBDCs. The focus is on international trade use cases, ensuring compliance with jurisdiction-specific policies, legal requirements, regulations, and governance needs. In 2022, a pilot involving real corporate transactions was conducted on the platform among participating central banks, selected commercial banks, and their corporate customers in four jurisdictions. The next stage of the project aims to evolve the tested platform into a minimum viable product. This involves further work on technology, legal and governance frameworks, exploring synergies with other BIS Innovation Hub projects and private sector solutions, and welcoming new participants and use cases.
The project has published related reports and press releases, highlighting the lessons learned from practical experiments, the development of the multi-CBDC platform, and the successful pilot of real-value transactions. The involvement of central banks from China and the United Arab Emirates in the digital currency project for cross