What is the “bridge” project for multiple central bank digital currencies
The Central Bank of the UAE and its partners from the Innovation Center of the Bank for International Settlements in Hong Kong, the Monetary Authority of Hong Kong, the Bank of Thailand and the Digital Currency Research Institute of the People's Bank of China have issued an official publication on the "mBridge" project for multiple central bank digital currencies.
The publication, entitled “Building a Multi-Digital Platform for Central Banks for International Payments”, highlights the progress made by the mBridge project, which aims to accelerate cross-border payments and finance international trade between participating banks using central bank digital currencies.
The project also aims to create a more efficient and innovative digital currency infrastructure for central banks to reduce current payment hurdles, including high costs, lack of transparency, low efficiency, and other operational complexities.
The project team identified a set of tests to verify the performance of the system based on real financial transactions derived from real financial information in the “mBridge” platform, to begin the application of the pilot system testing for the recently developed project.
In addition, a roadmap for the project for 2022 has been established, relying on flexible and rapid methods to develop viable services capable of supporting international trade finance transactions and other financial operations.
The 22 participants from the four countries participating in the Multi-Central Bank Digital Currency “Bridge” project identified 15 beta tests to assess the ability of the experimental mBridge platform to enhance cross-border payments on the ground.
The tests cover transactions across 11 sectors (worth up to one billion dirhams) to be tested on the project's pilot platform.
Five banks located in the UAE participated in some of these 15 tests, namely First Abu Dhabi Bank, Emirates NBD, Dubai Islamic Bank, HBC Bank and Standard Chartered Bank.
Priority was given to international trade finance transactions in the pilot tests, due to the high volume of trade exchange between the four countries, amounting to $731 billion.
The Governor of the Central Bank of the Emirates, Khalid Mohammed Salem Balama Al-Tamimi, said: “The (Bridge) project for multiple digital currencies for central banks is a significant development in the field of digital currencies for central banks, and we affirm in the Central Bank our commitment to continue to explore and develop the project jointly with the Bank for International Settlements and other central banks. Participation, as we aspire to provide better, faster, safer and more cost-effective means of international money transfers.”
He added, "This bulletin sets out the ambitious roadmap developed by the Central Bank and its central banking partners for the pilot (mBridge) platform, which is supported by an approach aimed at continuous development."
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