CHINA INTRODUCES DIGITAL YUAN AND MBRIDGE TO CHALLENGE DOLLAR-DENOMINATED PAYMENTS

In order to transform cross-border payments using Central Bank Digital Currencies (CBDC) and avoid the traditional dollar-dependent channels, China has presented mBridge and digital yuan.  

 

mBridge is a platform developed by a group of central banks of Hong Kong, Thailand, UAE, China, and the BIS Innovation Hub Hong Kong Centre.

 

The association of mBridge with the Bank for International Settlements (BIS) has orchestrated discussions on China’s intentions to reduce reliance on dollar-dominated settlements.

 

Some officials in the United States and Europe are worried that mBridge could provide China with an advantage in using digital currencies to reshape cross-border payments, potentially enabling the evasion of sanctions, taxes, and anti-money laundering regulations.

 

They added that it could break up the global financial landscape and intensify geopolitical tensions.

 

Analysts are of the opinion that mBridge will revolutionize cross-border payments because the project aims to address pain points in the current system.

 

Thailand sees mBridge as a potential instrument of making possible a world where cross-border payments shift from snail-paced days to lightning-fast seconds.

 

The partnership between central banks, the BIS, and emerging technologies highlights the ongoing transformation of the financial landscape.