How important is it for Saudi Arabia to join the Bank for International Settlements mBridge project?

In an approach that strengthens its position in the digital finance market, Announce The Bank for International Settlements (BIS) announced on Wednesday that the Saudi central bank has joined as a full participant in the mBridge project, a cross-border trial of central bank digital currencies (CBDCs) dedicated to international trade.

The mBridge project was launched in 2021 as part of a collaborative initiative between the innovation arm of the Bank for International Settlements and the central banks of China, Hong Kong, Thailand and the United Arab Emirates. With the aim of testing the feasibility of central bank digital currencies for instant cross-border trade and other payments using the project's blockchain technology, known as mBridge Ledger.

In the same statement, the BIS confirmed that after three years of work, the mBridge project had reached the minimum viable product (MVP) stage. He called on private sector financial firms to “come up with new solutions and use cases that help develop the platform and realize its full potential.”

In addition to the six full participants in the project, 27 other official bodies have signed. Including the International Monetary Fund (IMF), the World Bank and the central banks of countries such as Norway, South Korea and Turkey, as observers of the project. Give them access to a “sandbox” to experiment with technology.

Large international financial institutions are also participating in the project. Like Goldman Sachs, HSBC and six of China's largest state-owned banks.

The importance of Saudi Arabia joining the mBridge project

Represent Saudi Arabia joins the mBridge project A strategic step to strengthen its role in the central bank digital currencies market. It is an area that is experiencing rapid growth and development globally. By fully participating in this project, Saudi Arabia can explore and test the potential applications of this new technology to improve the efficiency and effectiveness of international trade and cross-border payments.

Blockchain technology and digital currencies for central banks are seen as innovations that could lead to a major transformation of the global financial system. International trade and cross-border payments It faces many challenges, including slow operations and high costs. Thanks to central bank digital currencies and blockchain technology, many of these obstacles can be overcome. This improves speed and significantly reduces costs.

The impact of the project on the global economy

The mBridge project has great potential to positively impact the global economy. By including major financial institutions and central banks from several countries. The way is open for widespread adoption of central bank digital currencies in international trade. This can help increase transparency, improve financial security, And facilitate global financial flows.

Additionally, this experience could serve as a model for other countries seeking to adopt CBDCs. Participation in the mBridge project provides participating and observer countries with the opportunity to better understand the technology and its potential applications before moving towards large-scale implementation.

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