The Bank for International Settlements (BIS) Innovation Hub announced that it has “graduated out” of Project mBridge.
Project mBridge is a major cross-border payments initiative designed to leverage wholesale central bank digital currencies (CBDCs).
BIS General Manager Agustín Carstens shared the transition during a fireside chat at the Santander International Banking Conference 2024 in Madrid, emphasizing that the decision was due to the project’s maturity and not political reasons or failure.
Project mBridge, which reached the minimum viable product (MVP) stage in June, brought together central banks from Thailand, China, the United Arab Emirates, and Hong Kong.
The four-year project has garnered significant attention amid geopolitical debates, raising questions about whether such initiatives could be used by BRICS nations to circumvent international sanctions.
Addressing these concerns, Carstens firmly stated, “mBridge is not the ‘BRICs bridge.'”
He emphasized that the BIS operates with a commitment to global standards, ensuring none of its projects, including mBridge, can be used by any countries subject to sanctions.
“We need to be observant of sanctions and whatever products we put together should not be a conduit to violate any of these sanctions,”
he said.
Carstens reiterated that BIS projects adhere to international regulations to avoid facilitating sanctioned activities.
Carstens also highlighted Project Agorá as another major BIS Innovation Hub initiative.
This project, involving central banks and over 40 private sector participants, explores the use of tokenised deposits and wholesale CBDCs to streamline cross-border payments, addressing inefficiencies in existing systems.
While mBridge has made notable progress in demonstrating how CBDCs can enhance cross-border transactions by reducing time and costs, Carstens acknowledged that the system remains years from full-scale operation.
He highlighted the broader impact of the project, emphasizing its role in fostering collaboration among central banks and advancing the use of CBDCs in international finance.
“The BIS is leaving that project, not because it was a failure and not because of political considerations but instead because we have been involved for four years and it is at a level where the partners can carry it on by themselves. That has happened already with other projects,”
Carstens remarked.
