Saudi Arabia has joined a significant central bank digital currency trial led by BIS, signaling a potential shift away from the dominance of the U.S. dollar in global oil trade. The collaboration, known as Project mBridge, involves central banks from China, Hong Kong, Thailand, and the UAE. With the project reaching the “minimum viable product” stage, it indicates progress beyond the prototype phase. Despite the interest in CBDCs from 135 countries and currency unions, the technical complexity and political sensitivity surrounding cross-border movement remain significant challenges.
Josh Lipsky, who runs a global CBDC tracker at the U.S.-based Atlantic Council. Said:
The most advanced cross-border CBDC project just added a major G20 economy and the largest oil exporter in the world.
This means in the coming year you can expect to see a scaling up of commodity settlement on the platform outside of dollars – something that was already underway between China and Saudi Arabia but now has new technology behind it.
Transactions on the mBridge platform can utilize the same code infrastructure as China’s e-yuan. This code is accessible to the project’s 26 other “observing members,” including institutions such as the New York branch of the Federal Reserve, the International Monetary Fund, and the European Central Bank. Additionally, the BIS announced that the mBridge platform is now compatible with the Ethereum Virtual Machine, which is integral to the Ether cryptocurrency network.
