Today mBridge, the cross border central bank digital currency (cross border CBDC) project, published a document showing 23 central banks are observing the initiative as well as the IMF and the World Bank. mBridge plans to launch a minimum viable project in the middle of next year. It was founded by the central banks of Thailand, Hong Kong, China and the UAE and is part of the Hong Kong BIS Innovation Hub.
So far 11 of the 25 observers have engaged in the sandbox that lets participants simulate mBridge nodes and transactions.
mBridge is one of the solutions that will address the G20’s aim to improve cross border payments. Using wholesale CBDC can allow direct international bank to bank payments, cutting out the need for correspondent banks, which adds friction and cost. A key benefit for commercial banks is they can reduce the need to hold accounts with foreign banks, Nostro accounts, which tie up significant capital. We recently explored this in a recent in depth piece on mBridge.
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