On September 22, the chief executive of the Hong Kong Monetary Authority (HKMA), Eddie Yue, confirmed that the mBridge project expects significant development in the coming days. The CEO delivered his keynote speech at the 2023 Bund Summit in Shanghai China outlining the expansion plan for mBridge, a platform developed to support central bank digital currency (CBDC) in cross-border transactions.
The CEO stated that the mBridge project had undergone multiple pilot trials to examine the efficiency of the CBDC. The mBridge project was developed by numerous central banks to support foreign transactions using CBDC and peer-to-peer (P2P) payments. The mBridge project has been design to support the user in meeting the regulatory requirements and compliance.
Launching of Minimum Viable Product
In a recently completed pilot test conducted by the Bank for International Settlements, HKMA, the central bank of China, Thailand, and UAE demonstrated that the mBridge project will enhance the speed of cross-border transactions. Additionally, the participants noted that strengthening the mBridge project provides cost-effective and transparent cross-border transactions.
The HKMA CEO explained that the impending launch of the minimum viable product (MVP) would be critical in expanding the mBridge project. Also, launching the MVP will be a gateway for the commercialization of the mBridge.
In his intriguing report, the CEO underlined that the team behind the mBridge plans on onboarding more central banks in the coming day. Yue stated that the expected enlisting of other central banks would be open to allow more participation from critical financial players.
Earlier, officials from the above-mentioned central bank developed the criteria for participating in the ongoing mBridge project. Under the proposed requirements to participate in the project, eligible central banks were not required to have established their own CBDC.
Ideally, the mBridge project team aimed at maintaining a small group of participants to attain the results. It was assumed that enlisting large consortia could slow the implementation of the mBridge.
Impact of Globalization in Emerging Markets
The report indicates that most participants, including the central banks of Israel, Sweden, Philippines, Korea, Indonesia, and Malaysia, have ongoing pilot testing of the CBDC. The CBDC Tracker report illustrated that the central banks of Nigeria, Bahamas, and Jamaica are the only participants who have successfully launched their CBDC.
Besides outlining the progress of the mBridge project, the HKMA CEO noted that the public has waned from supporting globalization. The executive stated that globalization has brought endless benefits to emerging markets.
However, the fragmentation of global economic risk has undermined globalization in most Asian countries. Yue admitted that, lately, there is a close connection between trade and supply chain linkages in Asia. The integration of the two encourages the use of local fiat in cross-border settlement.