China Reveals Details of Blockchain System for Currency Bridge
A Chinese official has provided insights into the country’s blockchain system for Currency Bridge, which enables atomic and cross-border payments with simultaneous forex settlement. Mu Changchun, the lead of the Digital Currency Institute of the People’s Bank of China, shared the latest developments in the technical and privacy frameworks of their central bank digital currency (CBDC) project, known as the ‘Money Bridge’.
A Proprietary Blockchain for Money Bridge
The Money Bridge project will utilize a proprietary blockchain called mBridge Ledger (mBL). This blockchain will offer essential services such as simultaneous foreign exchange and payment settlements, wallet administration, and privacy protection. The initiative is considered so advanced that discussions were held to bring it under the control of the International Monetary Fund (IMF) to prevent it from becoming a geopolitical tool.
A Successful Pilot Phase
The collaboration between the Digital Currency Institute and multiple central banks has resulted in a successful pilot phase. The participating banks, including the Hong Kong Monetary Authority, Bank of Thailand, and Central Bank of the United Arab Emirates, conducted real-world transactions using the Money Bridge platform. These transactions amounted to over one million yuan, with digital yuan transactions accounting for 5.46% of the activity. The transparency and security of the MBridge framework make it a potential benchmark for secure cross-border digital currency transactions.
Hot Take: China’s Money Bridge Project Revolutionizes Cross-Border Payments
China’s unveiling of its blockchain system for Currency Bridge marks a significant development in cross-border payments. The Money Bridge project, powered by the mBridge Ledger blockchain, aims to establish secure and efficient digital currency transactions across borders. With its advanced technical features and emphasis on privacy, this initiative showcases the potential of central bank digital currencies (CBDCs) in global financial systems. The successful pilot phase and collaboration with multiple central banks demonstrate the growing interest in exploring CBDC applications. As China continues to innovate in the digital currency space, it solidifies its position as a leader in financial technology.
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