Digital Currencies in International Settlements
MBRIDGE Project
Bibliographic Data
| ID | 7173200 |
|---|---|
| Authors | Y Mamaeva (0009-0007-5424-689X, Russian Federation, corresponding author) |
| Year | 2025 |
| Volume | 69 |
| Issue | 7 |
| Pages | 27-33 |
| Publication date | 2025-01-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | World Economy and International Relations (JOURNAL) |
| Journal identifiers | ISSN: 0131-2227 • E-ISSN: 2782-4330 |
| Publisher | Primakov Institute of World Economy and International Relations (PUBLISHER) |
| DOI | 10.20542/0131-2227-2025-69-7-27-33 |
| OpenAlex | W4412132879 |
| Language | EN |
| References cited | 2 |
Today, while the whole world is experiencing geopolitical conflicts and economic uncertainty, and the breadth and depth of financial sanctions are constantly increasing, SWIFT as a tool for making cross-border payments poses new challenges to the financial security of countries. The politicization and even the ‘weaponization’ of SWIFT has intensified the development of central bank digital currencies as an alternative to the existing payment system for cross-border transactions, not only retail payments. The mBridge (Central Bank Digital Currency Bridge) initially launched by BIS and the People’s Bank of China Digital Currency Institute together with the Hong Kong Monetary Authority, the Central Bank of Thailand, the Central Bank of UAE and, as of June 2024, the Saudi Central Bank offers a new way of cross-border payments. Innovative mechanisms in payment architecture, liquidity management, currency exchange, governance methods and network data transmission in the future may allow mBridge to become a serious alternative to SWIFT and a major instrument that will determine the future of international finance, as well as significantly minimize potential financial sanctions risks and secondary sanctions risks faced by countries. Therefore, it could undermine both the role of US dollar as global lead currency and of US surveillance of the global international payments. In 2024 mBridge has already evolved to become a Minimum Viable Product (MVP), containing enough features to be launched and used by new participating jurisdictions to undertake real-value transactions, subject to their own preparedness. The MVP platform is compatible with the Ethereum Virtual Machine (EVM), a decentralized virtual environment that executes code consistently and securely across all Ethereum nodes, thus is now suitable as a testbed for new use cases and interoperability with other platforms. The potential use of mBridge by the BRICS nations (Brazil, Russia, India, China and South Africa) to circumvent sanctions and undermine the dominance of US dollar raises significant concerns among Western financial institutions, and coincidentally or not, right after the BRICS Summit was held in Kazan, October 2024, BIS had ‘graduated out’ of the project it has helped develop since 2021, claiming mBridge is already on the level where the partners ‘can carry on by themselves’. As the situation unfolds, the whole world will watch closely how mBridge platform will influence the future of international finance where digital innovations meet regulatory and political challenges
Archaeology · Business · Geography · Human settlement · Economic Growth and Productivity · FinTech, Crowdfunding, Digital Finance · Global Financial Crisis and Policies
| Highly cited | No |
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