Multilateral central bank digital currency bridge project (mBridge) releases 15 use case manuals

On November 3, supported by the Hong Kong Innovation Center of the Bank for International Settlements, the Hong Kong Monetary Authority, the Central Bank of Thailand, the Central Bank of the United Arab Emirates, and the People’s Bank of China’s Digital Currency Research Project jointly initiated a multilateral central bank digital currency bridge research project and released a use case manual. Introduce the application scenarios and test progress of the project.

Multilateral central bank digital currency bridge project (mBridge) releases 15 use case manuals

The handbook shows a total of 15 potential application scenarios of currency bridges, including international trade settlement, cross-border e-commerce, and supply chain finance.

According to the manual, this test verifies the feasibility of the currency bridge test platform to improve the efficiency of cross-border payments in international trade settlement scenarios. This test also realized the business linkage between Currency Bridge, the People’s Bank of China’s trade finance blockchain platform, and Hong Kong’s trade linkage platform, and completed the joint verification of the order financing business and currency bridge’s cross-border payment capabilities.

Multilateral central bank digital currency bridge project (mBridge) releases 15 use case manuals

The Digital Currency Research Institute of the People’s Bank of China served as the chairman of the currency bridge project technical committee and built a currency bridge test platform. 22 domestic and foreign financial institutions including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China, China Foreign Exchange Trading Center, HSBC, Standard Chartered Bank, Hong Kong Stock Exchange, Thai Banking Association, etc. Organized to participate in the current test of the project, the transaction covers four jurisdictions and 11 industry scenarios, and the total transaction amount exceeds 2 billion yuan.

mBridge:Building a multi CBDC platform for international payments

Please click the original link for the PDF of the manual (including 15 use case introductions)

The following is a brief introduction of 15 business use cases:

1. International Trade Settlement

Participants in this use case include 19 banking financial institutions, 2 banking associations, and 1 stock exchange. The project team verified through tests that the mBridge test platform can solve the main pain points faced by cross-border payments, including high cost, low speed and operational complexity, while also ensuring the proper integration of policies, regulatory compliance and privacy mechanisms.

Multilateral central bank digital currency bridge project (mBridge) releases 15 use case manuals

2. The operability of digital trade finance platforms (Interoperability with digital trade finance platforms)

The participant in this use case is Bank of China (Hong Kong), which aims to study how to improve the efficiency of cross-border trade settlement when transactions are carried out between mBridge and two interconnected cross-border digital trade platforms.

3. Cross-boundary insurance payment between China and HKSAR in the Greater Bay Area

The participant in this use case is DBS Bank (Hong Kong), which used the “Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area” (Yinfa [2020] No. 95) (“Circular 95”) (the “Notice” is a response to 2019 The reiteration and development of the “Guangdong-Hong Kong-Macao Greater Bay Area Development Plan Outline” released in February 2005) and mBridge are aimed at exploring more efficient cross-border premium payment and claim payment.

4. Cross-border atomic settlement of a tokenised primary issuance

The participant in this use case is Goldman Sachs. By developing a digital asset platform based on blockchain technology and using mBridge’s comprehensive foreign exchange function, it provides atomic cross-border settlement services for the first issuance of tokenized corporate bonds.

5. Use mBridge to carry out foreign exchange transactions (FX transactions leveraging mBridge infrastructure)

The participant in this use case is the Hong Kong Stock Exchange, which aims to demonstrate how to use the central bank’s digital currency to complete foreign exchange settlement transactions.

6. Cross-border commercial payments

7. Programmable trade finance (Programmable trade finance)

8. Wealth Connect settlement

The participants in use cases 6-8 are all HSBC. Among them, use case 6 provides real-time 24*7 cross-border payment and supports peer-to-peer settlement; use case 7 uses programmable central bank digital currency to promote faster and more feature-rich trade financing settlement; use case 8 aims to study cross-border tokens Compliance and settlement of financial management products.

9. Digital-native corporate bond issuance

The participant in this use case is Societe Generale, which provides a cross-chain DvP solution based on the CAST framework for asset service smart contract embedding.

10. Low Value Aggregation Services (LOVAS)

The participant in this use case is Standard Chartered Bank. LOVAS is a 2-layer blockchain that integrates mBridge and domestic instant payment solutions, which can provide low-value cross-border payments and multilateral clearing in all four jurisdictions.

11. Multi-jurisdictional trades

12. Cross-border eCommerce

13. Supply chain financing

The participants in use cases 11-13 are the Thai Bankers Association and the International Bankers Association.

Use Case 11 provides an end-to-end simplified solution that supports international trade settlement across multiple jurisdictions.

Use case 12 connects local merchants, farmers, and SMEs to the international market through low-cost and near real-time payment methods.

Use case 13 enables banks to securely obtain verified data, thereby providing companies with more targeted financing services.

14. Foreign exchange derivatives (dual currency) (FX derivative)

15. Wealth Management Connect (WMC)

The participants in use cases 14 and 15 are UBS. Use case 14 explores the settlement business of tokenized dual currency tools through the payment method based on mBridge. Use case 15 aims to explore the platform performance of mBridge, which is used to manage the closed-loop requirements of the current wealth management connection plan (WMC).

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