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Tencent, the Chinese tech giant, was revealed to be participating in the tests that the Chinese institutions have completed using Mbridge, a CBDC-enabled cross-borders settlement platform. Tencent participated through its international settlements arm Tenpay, which piloted the use case of the Chinese CBDC, the digital yuan, to settle e-commerce exports using Mbridge’s rails.
Tencent Participated in the CBDC-Enabled Mbridge Pilot Phase
Tencent, one of the largest Chinese tech conglomerates, has participated in the pilot test of Mbridge, the central bank digital currency (CBDC) based cross borders settlement system. On the Chinese side of these tests, Tencent has been testing the feasibility of using China’s CBDC, the digital yuan, to settle payments.
Before Mbridge’s minimum viable product (MVP) release, Tencent had participated via Tenpay Global, its cross-border payments arm, by clearing e-commerce exports using Mbridge rails and the digital yuan.
Mbridge has the participation of the Bank of Thailand, the Central Bank of the United Arab Emirates, the People’s Bank of China (PBOC), the Hong Kong Monetary Authority (HKMA), and the recent addition of the Saudi Central Bank. However, while other countries have the possibility of linking their real-time payment systems, China has already linked its CBDC to the decentralized network. This allows for payments to be settled using the digital yuan.
Tencent was also one of the first firms involved in the digital yuan pilot, signaling the firm interest in participating in these initiatives. Wechat, a messaging app owned by Tencent, also started supporting digital yuan payments in March 2023, opening the doors for over 1.2 billion users to settle retail payments using the digital yuan.
Furthermore, Tencent’s owned private bank Webank was one of the first private institutions onboarded to the pilot, after the Chinese state banks.
While the Bank of International Settlements (BIS) is involved in the Mbridge project, the decentralized traits of the system have worried observers from Western states. These have foreseen its use to avoid possible economic sanctions exerted through traditional settlement rails like SWIFT.
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