The Bank for International Settlements (BIS) has decided to withdraw from the mBridge digital cross-border payments project due to the possibility of using the underlying technology to circumvent sanctions and a potential threat to the dollar. This is reported by foreign media with reference to BIS CEO Agustín Carstens.
Carstens stressed that "mBridge was not created to serve BRICS and cannot serve as a means to violate sanctions, but the countries supporting this project, including China, Thailand, Saudi Arabia, Hong Kong and the UAE, can continue to work on it independently based on the key technology proposed by China."
In 2021, BIS launched the mBridge project, aimed at creating a cross-border settlement platform outside the current correspondent banking system, which is heavily dependent on the dollar and, therefore, may become a target of US sanctions. mBridge will allow the use of digital currencies and reliable central banking systems to accelerate, simplify and reduce the cost of international financial flows.
BIS developed the mBridge system together with the central banks of China, which invested a lot in this project, Hong Kong, the UAE and Thailand. Saudi Arabia joined the platform in June, when mBridge received the status of a "minimum viable product".
Russian President Vladimir Putin considers the mBridge platform as a model for creating a unified BRICS system that would allow Russia to avoid financial sanctions by abandoning the dollar and the American banking system.
Despite the withdrawal of BIS from the project, mBridge developers stated that the project management structure, which provides participants with equal voting rights, will not change, and that the platform will continue to comply with international standards for combating financial crimes and sanctions. It is unclear whether the 31 observer participants of the project, which include Western central banks, will still have access to information about the platform.
