Saudi Arabia has partnered with the mBridge Initiative to improve cross-border payments by utilizing central bank digital currencies (CBDCs).
According to China Daily, the Saudi Central Bank (SAMA) recently announced its intention to participate in the mBridge initiative. This move has the potential to facilitate a rise in local currency transactions in the crude trade between China and Saudi Arabia.
mBridge Platform to Initiate MVP Stage
The Bank for International Settlements has established mBridge, an international digital currency platform. The Bank of Thailand, the Central Bank of the United Arab Emirates, the Hong Kong Monetary Authority, and the Digital Currency Institute of the People’s Bank of China are the founding central banks.
A BIS announcement indicates that the mBridge initiative has reached the minimum viable product (MVP) stage. This milestone encourages private sector firms to suggest innovative solutions and applications to further the platform’s development and showcase its maximum potential.
The report indicated that the mBridge project is now accessible to commercial banks within the six participating members for actual cross-border payment use, as the MVP stage signified.
The BIS indicated that over 26 official institutions, including the International Monetary Fund, the World Bank, and the European Central Bank, participated as observers, and the Saudi Central Bank became the sixth complete participant.
UAE’s First Cross-Border CBDC Payment
In February, the United Arab Emirates and China conducted their inaugural cross-border CBDC transaction, which involved digital dirham and digital yuan and had a total value of $13.6 M.
The mbridge transaction, during the Central Bank of the UAE’s 50th-anniversary celebration, pioneered using digital currencies in multilateral financial transactions. The Chinese Ambassador to the UAE, Zhang Yiming, and UAE Vice President and Deputy Prime Minister Mansour bin Zayed Al Nahyan attended the event.
Mansour invited Zhang to participate in the celebration by introducing the CBDC platform and initiating cross-border payments. This transaction marked the first real-time transaction since the Bridge’s phase one demonstration in 2022.
