“We cannot support any BRICS project to evade sanctions,” said the BIS director.
The project has reached the “minimum viable product” stage and is ready for implementation.
The Bank for International Settlements (BIS) is considering shutting down its pilot platform for cross-border payments, known as mBridge.
This is an idea raised by Agustín Carstens, general director of the BIS during a Group of 30 event held a few days ago. As reported by the Bloomberg news agency, the manager said that They could not directly support any BRICS projects. “We cannot operate with countries that are subject to sanctions; I want to be very clear about that,” said the manager.
Carstens’ comments were made shortly after Russian President Vladimir Putin reiterated the idea of creating a BRICS economic system in which a platform identified as BRICS Bridge is inserted. It is based on the same technology that supports the BIS project and is proposed as a tool to evade sanctions and potentially undermine the dominance of the dollar in the global financial system. This, within the framework of the BRICS Summit that took place last week.
Based on these statements, the project launched by the BIS in 2021, which promises to make it easier to send money around the world without depending on US banks, has been a topic of debate for central banks and finance chiefs at the International Monetary Fund (IMF) and World Bank meetings in Washington.
Doubts arise due to the inclusion of the mBrigde model as part of the new cross-border payments tools that would be used by the BRICS within their new system focused on de-dollarization. That is why these Western bodies now They evaluate the option of closing it.
As CriptoNoticias has reported, the mBridge project carried out by the BIS Innovation Center is led by China in the company of the United Arab Emirates (members of the BRICS), along with Hong Kong, Saudi Arabia and Thailand.
mBridge is ready for deployment
The tests currently being carried out with the project are based on the interaction of central bank digital currencies (CBDC), allowing immediate settlement between banks without the scrutiny of third parties such as SWIFT.
The pilot has already reached the real value testing phase, being classified as a “minimum viable product.” This means that already is ready for implementation. An advance that represents a new step in the quest for global trade to use US dollars less and less.
In fact, last January the central bank of the United Arab Emirates sent the first cross-border payment of “digital dirhams” worth 50 million dirhams ($13.6 million) to China via mBridge. In June, the BIS invited private lenders and other monetary institutions to join in and carry out real transactions.
In this way, mBridge promises to allow money to be sent around the world outside the current system of correspondent banks, potentially subject to US sanctions. Instead, it establishes direct digital links between the central banks of participating nations.
That is why it has served as a model for Russia’s plans to evade sanctions. Hence, the concerns of Western policy makers focus on the fact that China provided the platform’s key technological backbone. Something they consider puts them at a disadvantage and is beginning to be seen as a mistake.
In that sense, a possible closure of the mBridge project by the BIS would not prevent the central banks participating in the project from using the technologysince it is known that countries could decide to move forward even without the institution.
It must be taken into account, however, that although building the BRICS Bridge architecture may be technically feasible, Putin’s plan to challenge the dollar could face opposition from other members of the group who are not under US sanctions and who do not want to. undermine the dominance of the dollar, as the Indian government stated a few weeks ago.
