Saudi Arabia Joins mBridge Initiative for Cross-Border CBDC Payments

Saudi Arabia

has joined the mBridge project to enhance cross-border payments using central bank digital currencies (CBDCs).

According to a recent report by China Daily, the Saudi Central Bank (SAMA) has announced plans to join the mBridge initiative as a full participant, which could pave the way for increased local currency transactions in oil trade between China and Saudi Arabia.

mBridge Platform to Initiate MVP Stage

Project mBridge is an international digital currency platform initiated by the Bank for International Settlements. The founding central banks are the Hong Kong Monetary Authority, the Central Bank of the United Arab Emirates, the Digital Currency Institute of the People’s Bank of China, and the Bank of Thailand.

According to a BIS announcement, the mBridge project has now achieved the minimum viable product (MVP) stage. This milestone invites private sector firms to propose new solutions and applications to further develop the platform and demonstrate its full potential.

The report indicated that the MVP stage signified that the mBridge project is now accessible to commercial banks within the six participating members for real cross-border payment use.

In addition to the Saudi Central Bank joining as the sixth full participant, the BIS stated that over 26 official institutions – including the International Monetary Fund, the World Bank, and the European Central Bank – are participating as observers.

UAE’s First Cross-Border CBDC Payment

In February, the United Arab Emirates and China executed their first cross-border CBDC transaction with a total value of $13.6 million using digital dirham and digital yuan.

During the Central Bank of UAE’s 50th anniversary celebration, the mBridge transaction introduced the use of digital currencies in multilateral financial exchanges. UAE Vice President and Deputy Prime Minister Mansour bin Zayed Al Nahyan and Chinese Ambassador to the UAE Zhang Yiming attended the event.

Mansour invited Zhang to collaborate in starting the cross-border payment and introducing the CBDC platform during the celebration, marking the initial real-time transaction following the Bridge’s phase one pilot in 2022.