The Bank for International Settlements (BIS) has provided an update on its Project mBridge, a central bank digital currency (CBDC) bridge that is set to become a minimum viable project for commercial launch next year. The update, released on October 31, includes a wealth of information about the project that was previously scattered or unavailable.
One notable aspect of the update is the explanation of the project’s use of the Dashing consensus algorithm. This algorithm, which was announced earlier this month in Chinese-language media, is described as a Byzantine Fault Tolerance (BFT) consensus protocol that aims to reduce the time needed to achieve consensus and improve overall protocol performance.
The update also reveals new information about the project’s use of legal entity identifiers for Anti-Money Laundering and Countering the Financing of Terrorism. This represents an important step in ensuring the security and integrity of the project.
In addition to technical details, the update also contains promotional language, highlighting the benefits of the mBridge project. It states that the project can significantly reduce the number of steps in cross-border payments by allowing direct, bilateral connectivity between the payee’s and payer’s local banks, supported by interoperability with participants’ domestic payment systems.
One of the most significant revelations in the update is the list of observer organizations in the project. While their presence was previously known, their identities had not been specified. The list includes 25 observers, including central banks and organizations such as the International Monetary Fund and Federal Reserve Bank of New York. Eleven of these observers are active in the project’s sandbox.
Project mBridge was initiated in 2021 by the central monetary authorities of China, Hong Kong, Thailand, and the United Arab Emirates in partnership with BIS. The project announced plans for its commercial launch in September, and the latest update marks an important milestone in its development. The next step for the project is to determine if the platform tested can evolve into a Minimum Viable Product.
Overall, the update provides a comprehensive overview of the mBridge project and its progress towards commercial launch. It includes technical information, promotional language, and important details about observer organizations. As the project continues to develop, it is likely to have a significant impact on the world of cross-border payments and digital currencies.
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