The mBridge Initiative was launched in 2021, under the leadership of the Bank for International Settlements (BIS) Innovation Center, as a joint initiative of the People's Bank of China Digital Currency Institute, the Hong Kong Monetary Authority, the Bank of Thailand and the Central Bank of the United Arab Emirates. The main aim of the initiative is to create a platform for real-time, remittance-free and cross-border payments and foreign exchange transactions using central bank digital currencies (CBDCs).

How Does mBridge Work?

mBridge is a platform built on mBridge Ledger, a new blockchain. This platform connects the CBDCs of participating central banks, enabling international payments to occur instantly and at low cost. Transactions are processed automatically through smart contracts on the platform, eliminating the need for manual intervention.

Benefits of mBridge:

  • Faster Payments: mBridge offers much faster processing times compared to traditional international payment methods. Transactions can be completed in seconds, which is a significant advancement for international trade and money transfers.

  • Lower Costs: mBridge significantly lowers the cost of international payments by eliminating intermediaries and automating transactions. This is especially beneficial for small and medium-sized businesses (SMEs).

  • Increased Transparency: The mBridge platform increases financial transparency by ensuring that all transactions are traceable and auditable. This can help combat money laundering and other illegal activities.

  • More Inclusive Financial Systems: mBridge has the potential to increase financial inclusion by providing access to financial services to people who have no or limited access to banking services.

Development of mBridge:

The mBridge Initiative implemented a pilot with real-value transactions in 2022. The pilot successfully demonstrated the technical feasibility of the platform and its potential to facilitate cross-border payments. In 2024, the Central Bank of Saudi Arabia also joined the mBridge project, expanding the global scope of the platform.

Future of mBridge:

The mBridge Initiative is an innovative initiative that has the potential to transform international payments. If the platform is adopted by more central banks and commercial institutions, it could lead to a significant change in the global financial system. Future developments of mBridge include work to expand the platform's functionality, onboard new participants, and encourage the adoption of CBDCs.