Project mBridge Update: BIS Prepares for Commercial Launch and Reveals Observer Organizations
Summary:
The Bank for International Settlements (BIS) released an update on Project mBridge, a shift in tone indicating preparedness for commercial launch in 2024. The update outlines the governance structure, technical details, and the use of the Dashing consensus algorithm. It informs the project is exploring whether the platform can become a viable product by inviting new participants and use cases. The update notably reveals the identities of the 25 observer organizations involved in the project, including central banks and entities like the International Monetary Fund. Initiated in 2021 by the central monetary authorities of several nations in partnership with BIS, Project mBridge plans for its commercial roll-out next year.
On October 31st, the Bank for International Settlements (BIS) issued an informative and vibrant update about Project mBridge. It's a mix of technical and promotional discussions, signifying a change in focus as the project is set to become a viable product for commercial release next year. This update collates substantial details about the central bank digital currency (CBDC) bridge, which has been fragmented or not available before now. The governance structure is outlined in broad terms, while technical specifics are incorporated into the content in a way that is easily digestible by non-experts.
The project is exploring whether the tested platform can develop into a viable product, by persisting in technological, regulatory and governance work, as well as inviting new participants and use cases. As for the previously announced Dashing consensus algorithm, newly introduced, the report explains its application. The algorithm is in fact a Byzantine Fault Tolerance (BFT) consensus protocol, utilizing proofs of partial confirmation of block validation to decrease the consensus time and boost overall protocol performance.
The report also reveals new information on the use of legal entity identifiers for tackling Money Laundering and the Financing of Terrorism. While the technological details are embedded in content that comes off as admittedly promotional for central banking standards, they deliver potentially vital improvements to cross-border payments – offering a direct, bilateral link between the receiver's and sender's local banks with the capability to interoperate with domestic payment systems.
Notably, the report discloses a roster of observer organizations involved in the project. While their involvement was disclosed earlier, their exact identities were unknown until now. These 25 observers cover central banks and entities such as the International Monetary Fund and the Federal Reserve Bank of New York. Eleven of them are actively participating within the project’s sandbox, though their identities remain undisclosed.
Initiated in 2021 by the central monetary authorities of China, Hong Kong, Thailand, and the United Arab Emirates, in collaboration with the BIS, Project mBridge announced its intentions for a commercial rollout in September. According to the publication, the project’s next course of action is to evaluate whether the tested platform can become a viable product.
Published At
10/31/2023 8:15:00 PM
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