Bank of Thailand official Vachira Arromdee said on Tuesday the four countries participating in the multinational central bank digital currency (CBDC) have agreed to end the use case of paying foreign CBDC domestically.
See related article: BIS’ mBridge shows CBDCs enhance cross-border payment efficiency: HKMA
Fast facts
- Paying foreign currency through mBridge domestically can have “currency substitution effects” on the monetary policy, said the Executive Advisor of Bank of Thailand’s CBDC Projects at a panel of the Hong Kong Fintech Week.
- The mBridge, or mCBDC, is a collaborative CBDC project between the HKMA and the central banks of Thailand, China, the United Arab Emirates and the BIS to facilitate multi-currency cross-border payments.
- The mBridge project needs to strike a balance between convenience and maintaining domestic monetary policy and financial stability, said Arromdee.
- The laws, policies and technical design of the mBridge platform are viable approaches to mitigate the impact to domestic monetary policy, said Arromdee.
- Twenty banks from the four jurisdictions have conducted transactions worth over US$22 million on behalf of their corporate clients using the CBDCs issued on the mBridge platform, according to a report released in October.
- The next step for mBridge is “proceed to the stage,” said Colin Pou, an Executive Director of Hong Kong Monetary Authority, though he did not give a clear timeline.
See related article: Shenzhen leads China in cross-border CBDC transactions: report