Eddie Yue, the CEO of Hong Kong’s central bank, expects that the mBridge CBDC project will gradually transition to commercialization.
In a keynote speech at the 2023 Bund Summit, he detailed plans for the platform, which China, Thailand, Hong Kong and the United Arab Emirates are jointly developing in partnership with the Bank of International Settlements.
Project mBridge is a collaboration among central banks to develop a digital platform for cross-border payments using blockchain technology. It is seen by some as a potential challenger to traditional dollar-based global payment systems.
Now, more central banks are expected to hop on board and broaden the program’s scope.
“We are expecting to welcome more fellow central banks to join this open platform,” Yue said in the speech published Monday, although he did not specify which banks.
“And very soon we will launch what we call a minimum viable product, with the aim of paving the way for the gradual commercialisation of mBridge,” he added.
He said a recent pilot trial has shown that this wholesale central bank digital currency (CBDC) platform can accelerate cross-border payments while cutting costs and improving transparency.
Bloomberg has earlier reported that mBridge could simplify the use of China’s yuan as an alternative to the dollar by allowing its digital version to facilitate major corporate transactions.
China has taken the lead among developed nations in experimenting with a comprehensive CBDC. While it was planned for civil servants and government employees in Changshu to receive their payments in the country’s CBDC starting in June, it remains uncertain whether this implementation occurred as intended.
China’s CBDC is one of about twelve projects that have formally entered the pilot phase, as reported by CBDCTracker.org, alongside Russia, France, India and Singapore.
US politicians have discussed the idea several times, but there’s been no concrete details about the actual creation or trial of such a currency.
European Central Bank President Christine Lagarde told the EU Parliament’s Economic and Monetary Affairs Committee on Monday, that a euro CBDC pilot is “probably” 2 years away at the earliest before a determination will be made on whether to proceed with a public version.
During Yue’s speech, he highlighted the likelihood of China assuming a more substantial role in influencing regional supply chains.
He pointed out that China still holds a substantial and steady portion of worldwide imports, primarily due to its exportation of more intermediate goods and its increased market share in regional economies.
“Hopefully this new innovative platform will help resolve long-standing pain points in cross-border payments and enhance the efficiency of the global value chain,” Yue said.
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