Project mBridge, an innovative initiative by the Bank for International Settlements (BIS), is working on a multi-central bank digital currency (multi-CBDC) with the aim of inviting private sector involvement to enhance its prototype into a minimum viable product (MVP).
Commencing in 2021, Project mBridge was established by the BIS Innovation Hub in partnership with the central banks of Thailand and the United Arab Emirates, alongside authorities from China and Hong Kong. Subsequently, the Saudi Arabian central bank and 26 observing members joined the project.
The primary objective of this collaboration between central and commercial banks is to tackle inefficiencies in cross-border fiat payments, including high costs, slow processing times, and operational complexities. Ultimately, the goal is to develop a “universally accessible” multi-CBDC infrastructure.
Participants in the core mBridge team have been working on a prototype platform over the years, which involved the creation of the mBridge blockchain for facilitating real-time, peer-to-peer, cross-border payments and foreign exchange transactions. The anticipated launch of the mBridge MVP was announced in September 2023 by Hong Kong Monetary Authority CEO Eddie Yue.
Yue highlighted that tests have demonstrated mBridge’s ability to provide faster, more cost-effective, and transparent cross-border payments. However, at that time, the BIS did not have any intentions of involving private sector firms in the project. Yue mentioned that the mBridge MVP is technically capable of handling real-world transactions and is compatible with the Ethereum Virtual Machine.
In a related development, a recent report from the BIS indicated that central banks worldwide are likely to leverage generative artificial intelligence (AI) tools for cybersecurity in the near future. While these AI tools have enhanced banks’ ability to respond promptly to cyber threats and detect suspicious patterns, the primary concern for central banks remains the expenses associated with implementing such technologies.
As the project progresses, it is evident that Project mBridge is set to revolutionize cross-border payments and shape the future of digital currency transactions.