Central bankers say mBridge multi-country digital currency platform is worth the effort

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‘We must reduce new cross-border payment frictions while removing existing ones,’ says PBOC deputy governor

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The People’s Bank of China building in Beijing. Photo: Reuters

Yuke Xiein Beijing

Published: 6:15pm, 23 Oct 2024

Participants in mBridge, a multi-central bank digital currency (CBDC) platform, will need to trust each other and have respect for the legal frameworks of their partners if they want their cross-border payment tool to be successful, according to the deputy governor of China’s central bank.

In developing a transparent, efficient and functional cross-border payment platform, it is important to maintain “a balance between the rights and responsibilities of participating jurisdictions, while preventing disruptions to the international monetary and financial systems”, Lu Lei, deputy governor of the People’s Bank of China (PBOC) said at Sibos Beijing on Wednesday. The industry event is sponsored by Swift, the international payments network.

“We must reduce new cross-border payment frictions while removing existing ones, and we must avoid creating new barriers while reducing existing market fragmentations,” Lu said. “Furthermore, we must also avoid introducing additional geopolitical and compliance costs while reducing existing cross-border payment costs.”

mBridge is a platform for cross-border payments and foreign exchange transactions and was created using central bank digital currencies and distributed ledger technology.

Launched in 2021, the project was jointly developed by the Bank for International Settlements Innovation Hub and the central banks of China, Hong Kong, Thailand and the United Arab Emirates. Saudi Arabia joined the project in June. In June, the mBridge platform introduced a product that has sufficient features for early adopters, allowing for broader participation from both public and private sector companies.

Lu said the mBridge project should tackle issues or services that are undersupplied by banks, including payments in cross-border e-commerce and remittance that can be complicated and are not wildly profitable. He said the project should “step up to address these urgent pain points as it is good for human well-being, and is particularly meaningful to facilitate cross-border trades”.