Multiple CBDC (mCBDC) Bridge

8 Apr 2021

The  Multiple CBDC (mCBDC) Bridge is a wholesale central bank digital currency (CBDC) co-creation project that explores the capabilities of distributed ledger technology (DLT) and studies the application of CBDC in enhancing financial infrastructure to support multi-currency cross-border payments.

Payments, foreign exchange transactions and other operations usually travel across the world within the networks of large global banks, which serve as bridges between jurisdictions, a system generically known as correspondent banking. While serving a critical economic role, these networks and arrangements can be complex, sometimes fragmented, and involve operational inefficiencies

According to the BIS's most recent Annual Economic Report, multiple CBDC systems that join up national digital currencies in common interoperable platforms offer the greatest potential for improving today's systems' limitations. They provide central banks with a "clean slate" start, not burdened by legacy arrangements or technologies.

The BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People's Bank of China and the Central Bank of the United Arab Emirates, are working together to build such prototype platform, called "mBridge".

A pilot involving four jurisdictions and real-value transactions took place from 15 August to 23 September on the mBridge Ledger, a custom-developed DLT platform. The 20 participating commercial banks used the platform to settle different kinds of payments for corporate customers, focusing on cross-border trade. Over $12 million in value was issued onto the platform facilitating over 160 cross-border payments and FX transactions totalling more than $22 million in value. A detailed progress report will be released in late October 2022, covering technical design, legal, policy and other regulatory considerations, and the future roadmap of mBridge.