The Digital Currency Institute of the People’s Bank of China (PBoC) announced on February 24 that it has joined a project to study the multilateral central bank digital currency bridge, the m-CBDC bridge project.
Launched by the central banks of Thailand, United Arab Emirates and the Chinese mainland, as well as the Hong Kong Monetary Authority, the m-CBDC bridge project is designated to explore the application of central bank digital currencies in cross-border payment. By enhancing the crossborder payment system of the central banks and fundamental financial organs, the project aims to raise the efficiency and reduce the cost of cross-border payment.
The project will focus on distributed ledger technology (DLT), a technology that supports data sharing, duplication and synchronization between network members, and PvP settlement (payment versus payment settlement, a system to mitigate foreign exchange risk) to facilitate currency exchange in cross-border transactions.
Considering the PBoC’s current digital currencies are not completely based on the DLT, experts believe that joining the m-CBDC bridge project is helpful for the PBoC to connect to international standards and practices and pave the way for the internationalization of the digital yuan.
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