Unlocking the Future of Cross-Border Payments: Insights from Central Bankers on mBridge

Central Bankers Advocate for Trust in mBridge

Participants in mBridge, a multi-central bank digital currency (CBDC) platform, must cultivate trust and respect for the legal frameworks of their partners to ensure the success of their cross-border payment tool. This statement was made by Lu Lei, deputy governor of the People’s Bank of China (PBOC), during the Sibos Beijing event, which is sponsored by Swift, the international payments network.

Reducing Payment Frictions

Lu emphasized the need to reduce new cross-border payment frictions while eliminating existing ones. He stated, “We must avoid creating new barriers while reducing existing market fragmentations.” Furthermore, he noted the importance of steering clear of additional geopolitical and compliance costs while working to lower current cross-border payment costs.

The mBridge Initiative

mBridge serves as a platform for cross-border payments and foreign exchange transactions, utilizing central bank digital currencies and distributed ledger technology. Launched in 2021, this initiative was collaboratively developed by the Bank for International Settlements Innovation Hub alongside the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. Notably, Saudi Arabia joined the project in June, which introduced a product equipped with features aimed at early adopters, enabling broader participation from both public and private sectors.

Addressing Undersupplied Services

Lu highlighted that the mBridge project should focus on issues or services that are currently undersupplied by banks, such as payments in cross-border e-commerce and remittances, which can often be complicated and less profitable. He asserted that the project must “step up to address these urgent pain points as it is good for human well-being and particularly meaningful to facilitate cross-border trades.”