In a groundbreaking collaboration, the central banks of Hong Kong, China, Thailand, and the United Arab Emirates, in partnership with the Hong Kong Monetary Authority (HKMA), are set to unveil mBridge, a cross-border central bank digital currency (CBDC) initiative. Anticipated to launch by mid-2024, this project holds the potential to challenge Swift’s prevailing payment infrastructure, paving the way for broader payment fragmentation worldwide.
A Global Endeavor: The Bank for International Settlements (BIS) Overseeing mBridge
The mBridge project falls under the watchful eye of the Bank for International Settlements (BIS), underscoring its global significance. It boasts the participation of influential industry players, including Tencent, the company behind WeChat Pay and the WeChat app, indicating the wide-reaching implications of this initiative.
HKMA’s Dual Endeavor: e-HKD Explores Versatile Use Cases
Meanwhile, the Hong Kong Monetary Authority (HKMA) is not limiting its CBDC exploration to mBridge alone. The institution is diligently working on another CBDC-related project known as e-HKD. This digital currency is poised for diverse applications, from payments, deposits, and investments to programmable payments and venturing into new domains like tokenized deposits and tokenized assets.
Pioneering Trials: 16 Major Businesses Collaborate
To ensure the seamless integration of e-HKD into various sectors, the HKMA has initiated trials with the active participation of 16 major businesses. One such endeavor saw HSBC issuing eHKD to approximately 200 students and staff at the Hong Kong University of Science and Technology Business School in September. This pilot aims to evaluate the practicality and efficiency of digital currency usage in real-world scenarios.
Exploring New Horizons: Standard Chartered and Fubon Bank’s CBDC Research
Two prominent pilot participants, Standard Chartered and Fubon Bank, have embarked on comprehensive research into the manifold use cases of CBDCs. Notably, Fubon Bank has disclosed plans to collaborate with Ripple (XRP) in a real estate tokenization pilot, demonstrating the innovative potential of CBDCs in revolutionizing traditional financial practices.