The Bank for International Settlements (BIS) has exited the mBridge project, a digital payment system initially designed to facilitate cross-border transactions outside traditional banking structures.
Russia, under President Vladimir Putin, identifies similar technologies as potential tools to circumvent sanctions and potentially weaken the U.S. dollar’s global dominance.
BIS Withdraws from mBridge Digital Payment Project
Project mBridge, supported by China, Thailand, Saudi Arabia, Hong Kong, and the United Arab Emirates, was developed with China providing much of the technological foundation. Following BIS’s departure, these countries will continue advancing the project independently.
Speaking at an event in Madrid, BIS General Manager Agustin Carstens stated that the partners are capable of carrying on without BIS involvement, emphasizing that the decision was not politically motivated.
mBridge came into the spotlight at recent International Monetary Fund (IMF) and World Bank annual meetings, where Putin proposed a similar cross-border financial system tailored for the BRICS nations, they are Brazil, Russia, India, China, and South Africa.
This proposal aligns with Russia’s recent legislative advancements supporting digital assets, aimed at enhancing its financial flexibility amid mounting Western sanctions.
Putin’s initiative for a BRICS financial network could potentially sidestep existing banking systems that rely on the U.S. dollar and are thus subject to U.S. sanctions.
Russia’s Move Towards Cryptocurrencies
Earlier this year, Russia introduced two cryptocurrency-related bills focused on leveraging digital assets to navigate international trade barriers. Amid Western-imposed economic constraints following its actions in Ukraine, Russia has turned to digital finance as a strategic option to stabilize its economy and reduce dependence on traditional channels vulnerable to sanctions.
mBridge, under the BIS Innovation Hub, was designed to facilitate global payments without relying on the U.S.-dominated correspondent banking network. Having achieved “minimum viable product” status, the platform is ready for real-world testing, offering the potential to ease cross-border money transfers without the risk of U.S. restrictions.
Carstens clarified that the mBridge was designed to meet the broad needs of central banks rather than serving the interests of any specific political coalition.
“With respect to political aspects, the noise out there, mBridge is not the ‘BRICS Bridge,’” Carstens stated. “mBridge was not created to cater to the needs of the BRICS. It was put together to satisfy broad central bank necessities,” he further clarified.
With BIS stepping back, the mBridge project now continues as an independent venture for the remaining partner countries, marking an important moment in the development of alternative international financial systems.