The mBridge project, initiated by the Bank for International Settlements (BIS) in 2021, is a game-changer for cross-border payments. Built on distributed ledger technology (DLT), it aims to drastically reduce transaction costs and time, cutting them by up to 90% compared to traditional methods. This project is centered on using multiple central bank digital currencies (CBDCs) to facilitate instant, cheaper, and more efficient international transactions.
The project initially involved central banks from China, Hong Kong, Thailand, and the UAE, but in a significant move, Saudi Arabia recently joined as a full participant. This addition marks an important shift, given Saudi Arabia’s influence on global energy markets and its role in shaping financial ecosystems. The mBridge platform allows central banks to bypass traditional, often inefficient, correspondent banking systems, paving the way for faster, real-time payments, even across jurisdictions.
With Saudi Arabia on board, alongside other powerful observers like the IMF and World Bank, mBridge is positioning itself as a key alternative to older systems like SWIFT. The platform’s distributed ledger infrastructure offers greater efficiency while maintaining compliance and security through its sandbox environment, used by commercial banks and regulators alike(
This development could reshape global financial systems, making it crucial for countries heavily reliant on traditional cross-border payments to adapt quickly. (markets.businessinsider.com)(Bank for International Settlements)(The Paypers).