Project mBridge: how the BIS is building an alternative payment system without the dollar

The global financial system is undergoing a quiet but fundamental transformation. Against a backdrop of sanctions, market fragmentation and growing geopolitical risks, central banks are increasingly looking for ways to conduct international settlements faster, cheaper and without dependence on traditional dollar channels.

One of the most ambitious projects in this area is Project mBridge, initiated by the Bank for International Settlements (BIS).

What is Project mBridge?

Project mBridge is an experimental multilateral payment platform based on central bank digital currencies (CBDCs) designed for cross-border settlements directly between central and commercial banks in different countries.

Unlike the existing system:

• No correspondent banks are required;

• SWIFT is not used as a mandatory intermediary;

• Settlements take place directly and in real time.

The project is being developed under the auspices of the BIS Innovation Hub and brings together central banks in Asia and the Middle East. Official project page (BIS)

Who is participating in the project

The following central banks participated in the key stages of Project mBridge:

• China (People's Bank of China)

• Hong Kong (Hong Kong Monetary Authority)

• Thailand

• United Arab Emirates

Later, other regulators joined the testing as observers.

Source: BIS - mBridge: Connecting economies through CBDC

How mBridge works (simplified)

Technically, the platform is a shared distributed ledger (DLT) in which:

1. Each country issues its own CBDC.

2. Central and commercial banks are given access to the platform.

3. Cross-border payments are made directly — one country's currency is exchanged for another's without intermediate clearing.

4. Settlement is based on the payment-versus-payment (PVP) principle, reducing currency and settlement risk.

Source (BIS Innovation Hub)

Why this project is important

1. Reducing dependence on the dollar

Traditional cross-border payments almost always go through dollar correspondent accounts and US banks. mBridge allows countries to do without the dollar as a settlement currency.

2. Alternative to SWIFT (de facto)

Project mBridge is not officially positioned as a replacement for SWIFT, but in fact offers an alternative route for international settlements — particularly attractive to countries concerned about sanctions risks.

Source: Financial Times — Central banks test alternatives to SWIFT

3. Significant reduction in costs and acceleration of payments

According to the BIS, pilot operations have shown:

1. A reduction in the cost of cross-border transfers;

2. Settlements within seconds instead of days;

3. Minimisation of operational risks.

Source: BIS - mBridge pilot results

How mBridge differs from other CBDC projects

Project	Focus
e-CNY (China)	Domestic retail CBDC
Digital Euro	Domestic EU system
FedNow	Domestic US payment infrastructure
mBridge	International settlements between countries

mBridge is a supranational platform, not a single-country currency.

Project risks and limitations

Experts highlight several challenges:

• The need for legal harmonisation between countries;

• Cybersecurity and the stability of the DLT infrastructure;

• The political sensitivity of the project;

• Potential fragmentation of the global payment system.

Source: IMF - Cross-border CBDC and financial stability

What this means for the world and business

Project mBridge is a signal that:

• The world is moving towards a multi-currency payment architecture;

• The role of the dollar as a universal intermediary is gradually declining;

• Cross-border payments will become more regional and technology-driven.

For business, this means:

• Potential reduction in the cost of international transactions;

• New payment routes;

• The growing importance of digital infrastructure and compliance.

Conclusion

Project mBridge is not an overnight revolution, but a fundamental shift.

It does not replace the existing financial system, but creates a parallel layer that could become critically important in times of geopolitical instability.

Through mBridge, the BIS is carefully testing a future in which international money will be:

• Digital,

• Multilateral,

• Less dependent on a single centre of power.

This is what the new architecture of global finance looks like today.

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