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Mbridge challenges the US dollar in global finance shift

Mbridge challenges the US dollar in global finance shift

GrafaGrafa2024/10/24 04:35
By:Mahathir Bayena

The People’s Bank of China (PBOC) has emphasised the Mbridge platform's potential to enhance cross-border payments using central bank digital currencies (CBDCs).

This initiative seeks to reduce inefficiencies in the current financial system and address challenges faced by underserved regions, particularly in the ASEAN area.

During his address at the Sibos event in Beijing, PBOC Deputy Governor Lu Lei highlighted the importance of careful coordination and legal alignment among participants in the Mbridge platform.

He stated, “We must reduce new cross-border payment frictions while removing existing ones, and we must avoid creating new barriers while reducing existing market fragmentation.”

Lu pointed out that the platform must tackle the fragmented nature of cross-border payments, aiming to streamline processes and reduce geopolitical and compliance costs.

He noted that Mbridge should focus on regions underserved in terms of cross-border payment and currency services, which may include countries involved in the Belt and Road Initiative.

Launched in 2021, Mbridge is a collaborative effort between the Bank for International Settlements (BIS) Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates.

Saudi Arabia joined the initiative in June 2024, expanding Mbridge's features to promote wider participation from both public and private sectors.

Former PBOC governor Zhou Xiaochuan discussed the implications of Mbridge on the U.S. dollar’s global dominance.

He remarked, “The relationship between Mbridge and the U.S. dollar, or other currencies, is not only dependent on technological development, but also the policy itself in the Western countries.”

Kevin Wong, CEO of Swift Asia-Pacific, underscored the broader significance of Mbridge for the future of the financial ecosystem, emphasising the need for collaborative solutions: “The future lies in our ability to think beyond borders and to build systems that work together.”

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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