BRICS: BIS Distances Itself from Cross-Border Digital Currency Initiative

The Bank for International Settlements (BIS) recently announced it is stepping back from its involvement in Project mBridge, a cross-border central bank digital currency (CBDC) initiative it has supported since 2021.

Although mBridge has reached a stage ready for private sector participation, BIS head Augustín Carstens indicated that full operational status is still years away.

Developed with the Hyperledger Foundation, Project mBridge involves central banks from China, Hong Kong, Thailand, and the UAE, with Saudi Arabia joining in June as a full member. The project currently includes over 25 observer banks, including those from China and the UAE.

In a recent discussion, Carstens clarified that Project mBridge is not designed to facilitate sanctions evasion, specifically refuting suggestions that it could support BRICS nations in bypassing restrictions. He emphasized that the BIS strictly prohibits involvement with sanctioned entities.

However, the structure of mBridge—operating outside the correspondent banking system—has raised questions among observers about its potential as an alternative financial channel.

Meanwhile, Carstens promoted another BIS project, Agora, which aims to modernize the international financial system while maintaining the correspondent banking framework. Participants in Agora include the central banks of France, Japan, Korea, Mexico, Switzerland, the UK, and the Federal Reserve Bank of New York, with no involvement from BRICS countries.