mBridge
Building a multi CBDC platform for international payments
Participating Authorities
mBridge
mBridge: Connecting Borders
The mBridge trial platform has validated the proposition that central bank
digital currencies (CBDCs) can substantially increase the speed of
cross-border payments from multiple days to near real-time, while also
reducing cost. To continue building and testing the trial platform, the
project team has collaborated extensively with the private sector to identify
business use cases. This brochure summarises use cases, features trial
transactions on international trade settlement, and outlines the future
roadmap of the platform.
People’s Republic Of China Hong Kong SAR, China
PRC Corp HK Corp
PRC Bank HK Bank
mBridge
Cross-Border
Transactions
Thai Bank UAE Bank
Thai Corp UAE Corp
Thailand U.A.E.
Less fees Simpler No FX Higher Lower reporting
operations settlement risk transparency burden
2
mBridge
Use Case Summary
To further test, improve and expand the functionality of the mBridge trial
platform, a total of 22 private sector participants from four participating
jurisdictions – Hong Kong SAR, People’s Republic of China, Thailand and
United Arab Emirates – have identified 15 potential business use cases.
Use Cases Project Participants
International Trade Settlement 19 financial institutions,
Through testing, the project team validated that the mBridge trial 2 banking associations and
platform addresses the principle pain points of cross-border payments, 1 exchange as shown below*
including high cost, low speed, and operational complexities,
while also ensuring that policy, regulatory compliance, and privacy
mechanisms are appropriately integrated.
* Arranged in alphabetical order.
3
mBridge
Use Case Summary (continued )
Use Cases Project Participants
Interoperability with digital trade Bank of China (Hong Kong) Link
finance platforms Limited
To illustrate how the efficiency of cross-border
trade settlement can be enhanced when
transacting on mBridge as well as between
two inter-connected cross-border digital
trade instrument platforms
Cross-boundary insurance payment DBS Bank (Hong Kong) Limited
between Mainland China and HKSAR Link
Leveraging GBA Circular 2020-95 and
mBridge to develop efficient cross-boundary
insurance premium payment and claim
payout in GBA
Cross-border atomic settlement of Goldman Sachs (Asia) L.L.C. Link
a tokenised primary issuance
Primary issuance of a tokenised corporate
bond, settled atomically cross-currency
and cross-border
FX transactions leveraging Hong Kong Exchanges and Link
mBridge infrastructure Clearing Limited
Provision of FX products with CBDC
settlement utilising HKEX’s infrastructure
to facilitate FX transactions
Cross-border commercial payments HSBC Link
Provides real-time 24x7 cross-border
payment with point-to-point settlement
with finality
Programmable trade finance
Facilitates faster and feature-rich
trade finance settlement via
programmable CBDC
Wealth Connect settlement
Support atomic compliance checks and
settlement for cross-boundary tokenised
wealth management product
4
mBridge
Use Case Summary (continued )
Use Cases Project Participants
Digital-native corporate bond issuance Société Générale – FORGE Link
Provides a cross-chain DvP solution based
on the CAST framework, embedding smart
contracts for asset servicing and oracle
solutions for notifications and reporting
Low Value Aggregation Services (LOVAS) Standard Chartered Link
LOVAS is a Layer-2 blockchain integrated
with mBridge and domestic instant payment
schemes, that can provide cross-border
low-value payments aggregation and
multi-lateral clearing in all four jurisdictions
Multi-jurisdictional trades The Thai Bankers’ Assocation & Link
Deliver end-to-end streamlined solutions The Association Of International Banks
to support international trade settlement
across multiple jurisdictions
Cross-border eCommerce
Connects local merchants, farmers and
SSMEs to international markets through
low-fee and near real-time payments
Supply chain financing
Enables banks to access verified data
securely and provide better targeted
financing for companies
FX derivative (dual currency) UBS Link
Facilitates settlement of tokenised dual
currency instruments, directly through
mBridge-based payments
Wealth Management Connect (WMC)
Explores DLT/mBridge features
that could facilitate closed-loop
WMC payment requirements,
and enable further enhancements
5
mBridge
International Trade Settlement
mBridge offers a unique opportunity to improve international trade settlement.
Given that the total value of international trade transactions between
the four participating jurisdictions amounted to more than USD$730 billion
according to the World Bank ^, the mBridge Steering Committee has given
priority to this use case. Testing of sample trade settlement transactions
across 11 industries has commenced on the trial platform.
Total amount tested on the mBridge trial platform*
THB AED RMB HKD
10 billion
OR
1
billion
OR
2billion
OR
2
billion
4
People’s Republic Hong Kong
Of China SAR, China
Jurisdictions
involved
11 Unique
industries
Thailand U.A.E.
Including
semi-conductors,
medical equipment
and apparel Export Goods
^ Based on World Bank 2019 data. * Transaction values are rounded to the nearest billion.
6
mBridge
mBridge Design Approach
and Roadmap
The project is using an agile and iterative development approach, combined
with a modular bricks design that enables participating jurisdictions to
contribute functionality, connectivity and interoperability with existing and
future systems. The ultimate goal is to achieve a minimum viable product
and, eventually, production-ready system that can support the full process
of international trade settlement and, in due course, other potential
use cases summarised on pages 3, 4 and 5.
Iterative and agile process
Propose Develop Evaluate
Implementation considerations
• Technology requirements • System requirements • Participation models
• Minimum Viable • Legal governance • Further trials of business
Legal Framework • Policy and regulatory use cases
compliance requirements
Revise
International trade settlement work stream
2019 Q4 2021 2022 onwards
Inthanon-LionRock mBridge Pilot Minimum viable Production
Proof-of-concept Trial Platform product ready
* See ‘Inthanon-LionRock to
mBridge, Building a multi
CBDC platform for international
payments’ report ( page 62),
September 2021 for further
explanation. 7
