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- BIS’s exit from Project mBridge shifts focus to Project Agora, maintaining a more traditional approach to cross-border finance.
- BIS clarifies that mBridge is not intended as a tool for BRICS sanctions evasion, emphasizing compliance in global financial cooperation.
The Bank for International Settlements (BIS) has announced its departure from an active role in Project mBridge, a cross-border central bank digital currency (CBDC) initiative that it helped launch alongside central banks from China, Hong Kong, Thailand, and the UAE.
An economist noted in a tweet that, as the IMF-WB Annual Meetings and BRICS summit were simultaneously underway, policymakers must balance the geopolitics of payment systems with economic and technological nuances.
Today's big news on BIS no longer being a part of mBridge brings up what was reflected last week, as the IMF-WB Annual meetings and BRICS summit were simultaneously underway: policymakers have to balance the geopolitics of payments systems with the nitty-gritty of econ + tech. pic.twitter.com/OLGojwVghS
— Ananya Kumar (@ananpoe) October 31, 2024
Following the announcement of its “graduation” from Project mBridge, the project reached a minimum viable product phase in June and welcomed new members, including Saudi Arabia. BIS General Manager Augustín Carstens explained that full operational deployment remains several years away.
Reassuring Sanctions Compliance Amid BRICS Speculation
Speaking at the Santander International Banking Conference, Carstens addressed speculation that Project mBridge might be used as a tool for circumventing sanctions by BRICS nations, which have been advocating for de-dollarization.
He even firmly stated that mBridge is not a “BRICS bridge” for evading sanctions, clarifying that BIS collaborates only with nations adhering to international sanctions. While mBridge aims to streamline cross-border transactions for central banks, it is not designed for geopolitical purposes or to support BRICS’ monetary policies.
BIS Shifts Focus to Project Agora for Cross-Border Innovation
With BIS reducing its role in mBridge, it is now prioritizing Project Agora, an initiative that retains traditional correspondent banking systems, unlike mBridge. Participants in Project Agora include central banks from countries like Japan, South Korea, France, and the United States, notably excluding BRICS nations.
Additionally, as reported by CNF, BRICS recently revealed that it is working on a stablecoin, sparking speculation that the alliance could adopt Ripple’s XRP. As of today, Ripple (XRP) is trading at $0.514, with a 0.82% decrease in the past day and a 1.67% decrease in the past week.
This project supports BIS’s goal of advancing cross-border financial technology within established regulatory frameworks, reaffirming its commitment to compliance in global finance while exploring innovations in digital currency transactions, even as BRICS emphasizes the use of cryptocurrencies.
