China, Thailand, Hong Kong, and UAE Working on mBridge Project to Challenge USD Dominance
China, Thailand, Hong Kong, and the United Arab Emirates (UAE) are collaborating on the development of the mBridge project, aimed at challenging the dominance of the US dollar (USD) in international settlements. The mBridge is a digital platform that will provide an alternative to the USD for cross-border transactions.
Key Points:
- Bloomberg reports that a working product for the mBridge is expected to launch by the end of 2023.
- The mBridge platform aims to address challenges posed by the USD, such as limited settlement times during US working hours and potential delays during holidays.
- By leveraging blockchain technology, the mBridge platform will promote the use of digital yuan as an alternative to the USD for international trade settlements.
- Thailand’s central bank highlights the potential benefits of mBridge, including reduced cross-border transfer times from days to seconds and increased benefits for end-users and commercial banks with more participating jurisdictions.
- Experts predict that the USD will gradually lose its dominance in foreign exchange, with China’s renminbi and stablecoins posing a challenge.
Hot Take:
The development of the mBridge project by China, Thailand, Hong Kong, and UAE reflects the growing interest in challenging the USD’s dominance in international settlements. By leveraging digital platforms and central bank digital currencies, these countries aim to provide faster and more efficient cross-border transactions, reducing reliance on the USD. As the global landscape evolves, the USD may face increasing competition from other currencies and digital alternatives.
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