Tencent, the Chinese tech giant, was revealed to be participating in the tests that the Chinese institutions have completed using Mbridge, a CBDC-enabled cross-borders settlement platform. Tencent participated through its international settlements arm Tenpay, which piloted the use case of the Chinese CBDC, the digital yuan, to settle e-commerce exports using Mbridge’s rails. Tencent Participated […]
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Cross Border CBDC Project Mbridge Enters MVP Stage
Project Mbridge, the cross-border central bank digital currency (CBDC) project that seeks to integrate several currencies into a global network, has reached its minimum viable product stage. This means that each one of the participant central banks has deployed a validating node in the network, that is ready to perform real-value transactions CBDC Project Mbridge […]
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Project Mbridge Reaches Milestone: First Digital Dirham Cross-Border Settlement Goes Through
The first cross-border digital dirham payment was completed by Sheikh Mansour Bin Zayed Al Nahyan, Chairman of the Board of the Central Bank of the UAE, using the Mbridge platform, a central bank digital currency (CBDC) liquidity and interconnection tool. The settlement involved sending 50 million dirhams (.6 million) directly to China.
UAE Completes First Digital Dirham Settlement Using Mbridge
UAE has completed the first payment of its central bank digital currency (CBDC), the digital dirham, using the Mbridge platform, a CBDC interconnection platform. The settlement, which involved the disbursement of 50 million digital dirhams (.6 million), was completed by Sheikh Mansour Bin Zayed Al Nahyan, Chairman of the Board of the Central Bank of the United Arab Emirates (UAE), and sent this amount directly to China.
The transaction was completed during the fiftieth-anniversary celebration of the Central Bank of UAE, with Sheikh Mansour emphasizing the focus on making the UAE a financial hub with the help of the central bank.
The UAE, alongside China, Hong Kong, and Thailand, is part of the Mbridge initiative, a joint effort to simplify the exchange of digital currencies between the central banks of the group and streamline payments using non-traditional and distributed rails. Mbridge, with the participation of the Bank of International Settlements (BIS), aims to serve a market of over 0 billion, the combined amount of the goods exchanged by these countries in 2021.
Some nations have become concerned about the development of this initiative, expected to show a minimum-viable product later this year, due to how it would render the action of unilateral sanctions useless against any of the countries integrating it.
In particular, nations fear that Mbridge, when implemented and utilized, would empower the digital yuan to become a viable alternative to the U.S. dollar in the global trade arena by leveraging almost instant and low fee-based payment rails, leaving systems like SWIFT at a disadvantage.
What do you think about the first Mbridge-powered digital dirham transaction? Tell us in the comments section below.
Hong Kong Monetary Authority Advances e-HKD Tests, Mbridge Project
The Hong Kong Monetary Authority (HKMA) has recently completed a series of tests regarding the programmability of the e-HKD, the proposed Hong Kong central bank digital currency (CBDC). While still in its initial phases, the e-HKD presents “interesting” use cases, HKMA CEO Eddie Yue stressed. He also revealed that the Mbridge project aims to have a minimum viable product for mid-2024.
Hong Kong Monetary Authority Advances e-HKD Research
The Hong Kong Monetary Authority (HKMA) has recently offered new insight into the different tests conducted with the e-HKD, a proposed central bank digital currency (CBDC). Eddie Yue, CEO of the HKMA, revealed that these tests focused on the programmable function of the e-HKD, allowing the issuer to establish certain limits in which the digital currency can be used.
According to the South China Morning Post (SCMP), this feature was tested by the Bank of China in Hong Kong this month. Furthermore, the bank has teamed up with ten firms, allowing customers to use the e-HKD in various retail payment promotions.
On the significance of these tests, Yue stated:
There are some interesting use cases of e-HKD in the areas like programmable payments, and in new areas like tokenised deposits and tokenised assets.
However, Yue detailed that e-HKD was still just in its trial stages, stressing that the HKMA had to “find a use case that is better than the current retail payments. Because if you are not either safer, faster, or more convenient, then it will not be doable.”
Project Mbridge
The HKMA is also a part of Project Mbridge, a CBDC network currently being tested jointly with the People’s Bank of China (PBOC) and the central banks of Thailand and the United Arab Emirates. Regarding this test, Yue stressed that the four participants were working out “important policy issues like governance and liquidity provisions,” getting ready to launch a minimum viable product by mid-2024.
Yue’s estimations differ from what Reuters, citing four people with knowledge on the subject, reported in August when it informed that Mbridge might have a minimum working product ready by year-end. Mbridge is currently under the watch of several central banks, which fear it could be used to move funds beyond the limits and sanctions of Western countries.
What do you think about the e-HKD tests conducted by the Hong Kong Monetary Authority and the Mbridge project? Tell us in the comments section below.
Mbridge Project Has Observers Worried About Advances of the Digital Yuan
The Mbridge project, a central bank digital currency (CBDC) international payment system, is starting to worry observers. Such a system, when completed, could ostensibly allow the digital yuan to reach more countries in trade settlements, chipping away at the world dominance of the U.S. dollar and bypassing established sanctions systems.
Mbridge Project Worries Observers
The Mbridge project, a structure that would leverage central bank digital currencies (CBDCs) to move value in seconds, has American and European observers worried about the possible implications of its completion and implementation. While Mbridge is still in its construction and prototyping stages, Bloomberg reported it might have a minimum working product ready by year-end, according to four people with knowledge of the subject.
The system, which is being built with the participation of the Bank of International Settlements (BIS), would allow the digital yuan to further its reach as a trade settlement currency and challenge the U.S. dollar’s dominance in the global payments arena.
Even the International Monetary Fund (IMF) is concerned with Mbridge’s implementation, as undisclosed sources allegedly told Bloomberg that the institution held meetings to discuss the possibility of bringing it under the control of an undefined international organization.
Bringing CBDCs a Step Further
Experts fear that Mbridge could upend the traditional international finance system, as it would allow payments to move beyond the limits and sanctions established by countries like the U.S.
The system would use its own blockchain-based rails, sidestepping restrictions relying on organizations like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which provides the standard messaging system for cross-border payments. While Mbridge only encompasses China, Hong Kong, Thailand, and UAE, the total goods exchanged by these nations was 4 billion in 2021.
According to statements from the Bank of Thailand, Mbridge would be far superior to traditional payment rails, allowing settlements to be processed in seconds rather than in days. The bank also hinted at the possible addition of more nations to the project, stating that it would “offer more benefit to end-users and commercial banks if there are more participating jurisdictions to join.”
Russia, a nation facing sanctions from Western countries, is on the verge of starting a pilot test for its own CBDC, the digital ruble, involving 13 commercial banks. The Bank of Russia is also discussing the integration of the digital ruble with other friendly nations to complete cross-border payments and settlements.
What do you think about the Mbridge project? Tell us in the comments section below.