Project mBridge, a collaborative initiative involving multiple central banks and the Bank for International Settlements (BIS), has achieved a significant milestone. This innovative project aims to develop a multi-central bank digital currency (CBDC) platform for instant cross-border payments and settlements using distributed ledger technology (DLT). The platform now welcomes further international participation and private sector proposals for value-added solutions.

SAMA’s Participation

Since its inception in 2021, Project mBridge has included the Bank of Thailand, the Central Bank of the UAE, the Digital Currency Institute of the People’s Bank of China, and the Hong Kong Monetary Authority. Recently, the Saudi Central Bank (SAMA) joined as a full participant, enhancing the collaborative effort which now includes over 26 other central banks as observers. SAMA’s involvement underscores Saudi Arabia’s commitment to building an innovative and efficient cross-border payments infrastructure.

Strategic Importance of SAMA’s Role

According to SAMA, its participation in Project mBridge aligns with its pursuit to construct a robust cross-border payments infrastructure in collaboration with international financial institutions and central banks. SAMA has been exploring the potential of wholesale CBDC to evaluate the feasibility of using it to enhance the effectiveness of cross-border payments and settlements between commercial banks. SAMA stated: “We are committed to investigating the potential of wholesale CBDC, focusing on policy-related issues to boost the effectiveness of cross-border payment and settlement processes.”

Major Milestones

In January 2024, the UAE conducted the first cross-border payment using its CBDC, the ‘Digital Dirham,’ to China on the mBridge platform, marking a historic first. Several commercial banks are now using the platform for real-time, peer-to-peer transactions and foreign exchange operations, facilitated by the mBridge Ledger, an innovative blockchain infrastructure.

Governance and MVP Stage

The mBridge platform now includes a comprehensive governance and legal framework, supporting real-value transactions and ensuring compatibility with the Ethereum Virtual Machine. Reaching the minimum viable product (MVP) stage, the platform is functional and ready for early adopters, allowing for real-world testing and feedback.

Looking Ahead

His Excellency Khaled Mohamed Balama, governor of the Central Bank of the UAE, emphasized the project’s strategic importance: “By collaborating with our international partners, we aim to develop a robust, efficient, and interconnected global payments infrastructure that benefits all participants while maintaining the highest security standards.”

SAMA’s active involvement and commitment to Project mBridge highlight the potential of wholesale CBDC to revolutionize cross-border payments, ensuring a more efficient, secure, and inclusive global financial ecosystem. As the project continues to evolve, the collaborative efforts of central banks like SAMA will be crucial in shaping the future of international financial transactions.