ASEAN and Belt and Road Initiative: The Promise of mBridge CBDC Integration

ASEAN and Belt and Road Influence on CBDC Development

Participants in mBridge, a multi-central bank digital currency (CBDC) platform, must foster mutual trust and respect for legal frameworks to ensure the effectiveness of their cross-border payment solution. Lu Lei, deputy governor of the People’s Bank of China (PBOC), highlighted at Sibos Beijing the necessity of balancing rights and responsibilities among jurisdictions to avoid disrupting the international monetary system.

Reducing Barriers in Cross-Border Payments

• Lu emphasized the need to reduce existing cross-border payment frictions and avoid creating new barriers.
• mBridge, launched in 2021, aims to streamline cross-border payments using distributed ledger technology (DLT) and is backed by the Bank for International Settlements Innovation Hub.
• Addressing undersupplied services in payments, especially for e-commerce and remittances, is crucial for enhancing human well-being.

Collaboration with ASEAN and Belt and Road Participants

Lu advocates for strong collaborations with ASEAN and Belt and Road Initiative participants due to their close trade ties and stable geopolitical conditions. This partnership can help improve payment services in underserved economies.

Impact on the US Dollar

Zhou Xiaochuan, former PBOC governor, stated that the US dollar's dominance is contingent on U.S. government policy, suggesting that the relationship between mBridge and the dollar will depend significantly on wider political context rather than solely on technology.

The mBridge initiative serves as a pivotal move toward enhancing financial cooperation and payment solutions in an increasingly digital age.