20 Banks Settled Cross-border Transactions Over $22M through BIS CBDC Project ‘mBridge’

BIS’ Project mBridge Facilitated 164 FX Transactions Totaling $22M+ in Its 6-Week Pilot Stage.

The mBridge Project has demonstrated efficient cross-border settlements, as participating banks leverage it for 164 FX transactions worth over $22M in six weeks.

The mBridge Project is a synergistic effort from the Bank for International Settlements (BIS), the Hong Kong Monetary Authority (HKMA), and the central banks of the UAE, Thailand, and China. The project seeks to demonstrate the efficiency of cross-border settlements by using a multi-CBDC platform.

The 20 participating banks were from four jurisdictions: China, the United Arab Emirates, Hong Kong SAR, and Thailand. The 164 FX transactions involved the four distinct currencies from the respective jurisdictions. The just-concluded pilot stage was aimed at putting the mBridge Project to the test, The Hong Kong Monetary Authority (HKMA) said in a press release.

mBridge looks to leverage the power of blockchain technology in facilitating FX payments and transactions across several countries at near-instant speeds, as opposed to what is obtainable with traditional cross-border money transfer systems.

Following its introduction, the mBridge was set in motion for its 6-week pilot stage from August to September. A recent report sharing updates on the pilot suggests that the mBridge or mCBDC project does facilitate more efficient cross-country settlements. BIS shared the report early on Wednesday to update the public on the activities involved in the pilot stage.

The report discloses that 20 participating banks were able to leverage the mBridge Project to conduct 164 real-value foreign exchange payments and settlements worth $22M+ within the six weeks of the pilot – from August to September.

BIS and up to 22 participating institutions from all four jurisdictions have identified several business use cases. Speaking on the development, Tayo Tunyathon K. – a Senior Specialist on CBDCs at the Bank of Thailand – highlighted four areas of improvement a multi-CBDC platform can contribute to, according to their findings from the pilot.

These areas include: 

• Decrease cross-border transfer times from 3-5 days to several seconds
• Enable direct P2P linkages between banks to lower costs
• Reduce settlement risk
• Support the use of local currencies in international payments.

The successful conclusion of the pilot sets the stage for further use case demonstrations. “Going forward, the HKMA and the rest of the project team will continue to work towards developing the mBridge platform into a Minimum Viable Product and ultimately a production-ready system,” the HKMA noted in its report.

As reported by The Crypto Basic, Norway, Sweden, and Israel joined CBDC development with BIS in September this year.

Central banks of Australia, Singapore, South Africa, and Malaysia also tested cross-border settlements with the aid of BIS in Sep last year.

Central banks of France and Switzerland successfully completed the testing of cross-border payments In Digital Euros And Swiss Francs back in Dec 2021.