Saudi Arabia becomes a full participant in Project mBridge

Saudi Arabia has officially joined Project mBridge, a groundbreaking initiative led by China aimed at revolutionizing cross-border payments through central bank digital currency (CBDC). The Saudi Central Bank’s involvement as a “full participant” was announced by the Bank for International Settlements (BIS), marking a significant step towards modernizing the country’s payment systems and potentially reducing reliance on cash.

Launched in 2021, Project mBridge is a collaborative effort involving the central banks of China, Thailand, Hong Kong, and the United Arab Emirates (UAE) with the goal of offering digital alternatives to physical cash and enhancing payment efficiency. The platform has now progressed to the “minimum viable product” phase, prompting the BIS to invite private financial institutions to contribute innovative solutions that maximize the platform’s potential.

With around 135 countries accounting for 98% of global GDP exploring CBDCs, the addition of Saudi Arabia to Project mBridge signifies a major milestone in advancing cross-border digital currency projects. This development is expected to facilitate commodity settlement outside of traditional currencies, particularly in the realm of oil trading between China and Saudi Arabia.

The Saudi Central Bank has been evaluating the use of wholesale CBDC to streamline cross-border payment and settlement processes among commercial banks. In addition to the six full participants, Project mBridge has garnered support from 27 other institutions, including the International Monetary Fund (IMF), the World Bank, and prominent financial entities like Goldman Sachs and HSBC. The platform’s compatibility with the Ethereum Virtual Machine software further enhances its capabilities and reinforces its position in the digital currency landscape.

Project mBridge’s core objectives include facilitating swift and cost-effective cross-border payments while promoting financial inclusion, particularly in regions where correspondent banking poses challenges. By bringing together key global players and leveraging innovative technology, the initiative aims to revolutionize international trade and payment systems for the benefit of all stakeholders.