BIS announced it will withdraw from Mbridge, a project aimed at using CBDC to connect the financial systems of several countries, as this project could potentially help BRICS nations evade economic sanctions.

BIS withdraws from the Mbridge project due to potential BRICS sanction evasion requests.

The Bank for International Settlements (BIS) has ultimately decided to withdraw from participating in Mbridge, a project launched in 2021 aimed at establishing a parallel system based on central bank digital currency (CBDC) for international payments. The decision was made after the organization considered the potential uses of Mbridge to facilitate trade among countries in the BRICS bloc, avoiding Western sanctions imposed on traditional financial routes.

Explaining the reasons behind BIS's decision, General Manager Agustin Carstens pointed to the direction of BRICS. At a recent event in Madrid, he stated:

Mbridge was not created to serve BRICS. There is nothing we do that could become a means to violate sanctions.

Carstens emphasized that Mbridge is still in its early stages and is not ready for countries participating in this initiative, including the UAE, China, Hong Kong, Thailand, Saudi Arabia, and the BIS Innovation Hub, to use at this time. However, he added that these partners are free to proceed with the project on their own.

Although the project has not been widely implemented, the basic functionality to complete international transactions is in place, as it has reached the minimum viable product (MVP) stage. This means that each country already has a validation node in the Mbridge system, allowing them to verify and execute transactions on the network.

Additionally, the UAE has utilized this network to carry out the first digital dirham payment transaction, disbursing ($13.6 million) directly to China.

BIS's decision came after considering its involvement in the project. Recently, Carstens warned about the implications of the organization participating in an initiative that could help BRICS nations like Russia evade economic sanctions. "We cannot directly support any project for BRICS because we cannot operate with countries that are under sanctions — I want to be clear about that," he explained.
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