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The People’s Bank of China emphasized the Mbridge platform’s role in improving cross-border payments through the use of central bank digital currencies (CBDCs), aiming to reduce inefficiencies and avoid new barriers. The platform, which targets underserved regions like ASEAN, could reshape global finance and challenge the U.S. dollar’s dominance while requiring careful coordination to maintain geopolitical and regulatory balance.
PBOC Deputy Governor Highlights Mbridge Platform’s Role in Cross-Border Payments
Lu Lei, deputy governor of the People’s Bank of China (PBOC), highlighted the need for careful coordination and legal alignment among participants in the Mbridge central bank digital currency (CBDC) platform during his speech at the Sibos event in Beijing on Wednesday. He emphasized the importance of establishing “a balance between the rights and responsibilities of participating jurisdictions while preventing disruptions to the international monetary and financial systems.”
Lu underscored that the platform must tackle existing challenges in cross-border payments, which can often be fragmented and inefficient. He stressed:
We must reduce new cross-border payment frictions while removing existing ones, and we must avoid creating new barriers while reducing existing market fragmentation. Furthermore, we must also avoid introducing additional geopolitical and compliance costs while reducing existing cross-border payment costs.
He added that the platform should focus on regions where “cross-border payment and currency services may still be underserved in many of these economies,” such as the Association of Southeast Asian Nations (ASEAN) and Belt and Road Initiative participants, where stable geopolitical conditions can support smoother operations.
Launched in 2021, Mbridge is a cross-border payment and foreign exchange platform that uses central bank digital currencies and distributed ledger technology. The project was developed through a partnership between the Bank for International Settlements (BIS) Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. In June 2024, Saudi Arabia joined the initiative, which has now expanded its features to allow broader participation from both the public and private sectors.
Former PBOC governor Zhou Xiaochuan touched on the potential implications of Mbridge on the dominance of the U.S. dollar in global trade. He described:
The relationship between Mbridge and the U.S. dollar, or other currencies, is not only dependent on technological development, but also the policy itself in the Western countries.
Kevin Wong, Asia-Pacific CEO of Swift, spoke about the broader significance of Mbridge for the future of the financial ecosystem. “The future lies in our ability to think beyond borders and to build systems that work together, ensuring that every one of us can benefit from the investments of the digital age because this era demands not just digital solutions. It demands global ones,” he noted.