Saudi Arabia central bank, the Saudi Arabian Monetary Authority (SAMA), has joined the mBridge project as a full participant, marking a significant step towards faster and more efficient cross-border payments using central bank digital currencies (CBDCs). This move, reported by China Daily, could also pave the way for increased trade settlements in local currencies between China and Saudi Arabia, particularly for oil exports.
mBridge is a collaborative initiative led by the Bank for International Settlements (BIS) Innovation Hub. It involves central banks from Hong Kong, Thailand, United Arab Emirates (UAE), and China’s Digital Currency Research Institute. The project recently achieved a key milestone: reaching the minimum viable product (MVP) stage. This signifies that the mBridge platform is now operational and ready for testing by commercial banks within the member countries. They can now utilize the platform for real cross-border transactions using CBDCs.
The mBridge project has garnered significant interest beyond the initial participants. Over 26 official institutions, including heavyweights like the International Monetary Fund (IMF), the World Bank, and the European Central Bank, are closely following the project as observers. This high level of participation underscores the global interest in exploring CBDCs for cross-border transactions.
The potential of mBridge was further highlighted in February when the UAE and China successfully completed the first-ever cross-border CBDC transaction using their digital currencies – the digital dirham and the digital yuan. This $13.6 million transaction, conducted during the UAE Central Bank’s 50th anniversary celebration, showcased the real-world application of CBDCs in facilitating international financial exchanges.
With Saudi Arabia’s involvement and the project reaching the MVP stage, mBridge is poised to play a pivotal role in shaping the future of cross-border payments. The project’s success could lead to faster, cheaper, and more secure international transactions, potentially revolutionizing global trade and financial interactions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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