Saudi Central Bank Joins mBridge Network for CBDCs

The Bank for International Settlements (BIS) revealed today, Wednesday, that its mBridge project has reached the minimum viable product stage and is ready for wider use. Concurrently, the BIS announced that Saudi Arabia, represented by the Saudi Central Bank, has joined as a full member of the project.

mBridge is a blockchain-based network that aims to connect central and commercial banks across multiple countries, to carry on and settle cross-border payments instantly and at low cost, using central bank digital currencies (CBDCs) – which are stablecoins issued by central banks as digital equivalents of fiat currencies.

The mBridge network currently includes the UAE, China, Hong Kong, Thailand, and the new member, the Kingdom of Saudi Arabia. Months ago, the UAE conducted the first transfer using the mBridge network by sending 50 million digital dirhams to China.

The BIS stated in a press release that the project, built on its own blockchain called mBridge Ledger, “aims to tackle some of the key inefficiencies in cross-border payments, including high costs, low speed and operational complexities. It also addresses financial inclusion concerns (…)”

A 2022 study by the BIS showed that 90% of central banks around the world are exploring the potential issuance of central bank digital currencies. According to the Atlantic Council website, 11 countries have issued CBDCs to date, 21 countries are in the pilot stage, 33 countries are in the development stage, and 46 countries are in the research stage.

It is worth noting that last Sunday, the Qatar Central Bank revealed that it has completed developing the necessary infrastructure to launch its own digital currency, and is prepared to test the currency in the realm of high-value payments with a group of local and international banks.

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