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Project mBridge reveals details of its workings ahead of MVP, commercial debut

October 31, 2023 Coin Telegraph

BIS

Project mBridge has put together a slick publication with lots of new information to let the world know what the hottest project in CBDC is.

The Bank for International Settlements (BIS) released a colorful and fact-filled Project mBridge update on Oct. 31. The publication combines technical and promotional discussions in a shift of tone as the project prepares to become a minimum viable project for commercial launch next year.

The update gathers a significant amount of information about the central bank digital currency (CBDC) bridge that had been scattered or completely unavailable until now. The governance structure is explained in general terms, and technical details are slipped into the text at a level of readability that makes it accessible to non-specialists.

A next envisaged stage in Project #mBridge is whether the tested platform can become a minimum viable product, with continued work on the technology, legal and governance, and welcoming new participants and use cases. Read the new report: https://t.co/dzQCxz9UYL #BISInnovationHub pic.twitter.com/4ZtHDrERK8
— Bank for International Settlements (@BIS_org) October 31, 2023

The update explains the project’s use of the Dashing consensus algorithm, which was introduced earlier this month and had previously only been announced in Chinese-language media. It describes it as:

“A Byzantine Fault Tolerance (BFT) consensus protocol that uses proofs of partial confirmation of a block validation to reduce the time needed to achieve consensus and to improve the overall protocol performance.”

The use of legal entity identifiers for Anti-Money Laundering and Countering the Financing of Terrorism is also new information.

The technical information is sandwiched in text that is, at least by the standards of central banking, blatantly promotional:

“With Project mBridge, the number of steps [in cross-border payments] can be significantly reduced by allowing direct, bilateral connectivity between the payee’s and payer’s local banks supported by interoperability with participants’ domestic payment systems.”

One of the bigger revelations in the update is a list of observer organizations in the project. Their presence was known before but never specified. There are 25 observers, which include central banks and organizations such as the International Monetary Fund and Federal Reserve Bank of New York. Eleven of them are active in the project’s sandbox. Their identities were not revealed.

*Observing members of Project mBridge. Source: BIS*

Project mBridge was initiated in 2021 by the central monetary authorities of China, Hong Kong, Thailand and the United Arab Emirates in partnership with BIS. It announced plans for its commercial launch in September. This publication calls "see[ing] if the platform tested can evolve to become a Minimum Viable Product" the project's next step.

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China opens industrial park for digital yuan CBDC development in Shenzhen

October 12, 2023 Coin Telegraph

CBDC

The government is incentivizing new residents to come develop payment solutions, smart contracts, hard wallets and promotions for the digital yuan.

China opened an industrial park dedicated to developing the digital yuan ecosystem on Oct. 11, according to Chinese press reports. This is the first such park dedicated to the central bank digital currency (CBDC), which is also referred to as the e-CNY.

The industrial park is located in the Luohu district of Shenzhen adjacent to Hong Kong. It is opening with nine residents. According to reports, the district government has announced ten “initiatives to boost the development” of the digital yuan ecosystem that involve payment solutions, smart contracts, hard wallets and digital yuan promotion.

Incentives are being offered to residents that include up to three years’ free rent. Commercial banks can receive up to 20 million yuan ($2.7 million) for settling there, startups are eligible for up to 50 million yuan ($6.9 million). Total government support is set at 100 million yuan ($13.7 million). Loans at advantageous rates are also being offered.

Among the first residents of the park were Hengbao, Wuhan Tianyu Information and Lakala Payment. Hengbao and Tianyu produce payment cards, among other things. Lakala is a payments processor and Visa partner.

The Shenzhen Digital RMB Industrial Park officially launched operations on Wednesday, according to a press briefing held in the southern Chinese metropolis of Shenzhen https://t.co/Pi3Z6bjUvp pic.twitter.com/SehYDnhoUu
— China Xinhua News (@XHNews) October 12, 2023

Wuhan Tianyu Information executive deputy director Zeng Zhaoxiang told China Daily:

“We hope to achieve synergistic effects in the industrial chain and jointly promote the development of the park."

China has taken many measures to promote the usage of the digital yuan, which is officially in the pilot stage. Twenty-six cities are participating in the pilot, and the CBDC is accepted by 5.6 million merchants – a number that is likely to grow steadily thanks to government encouragement and technological development.

The digital yuan app recently added an option for tourists to use Visa and Mastercard to add to their wallets. Nonetheless, with 261 million digital yuan wallets created as of 2022, adoption is considered sluggish.

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Bitcoin gains legal recognition as digital currency in Shanghai China

September 26, 2023 Coin Telegraph

Bitcoin mining

A similar report from another Chinese court earlier in September recognized cryptocurrencies as virtual properties protected by law.

The Shanghai Second Intermediate People's Court in China has reportedly recognized Bitcoin as a unique and non-replicable digital asset while acknowledging its scarcity and inherent value.

The Chinese court released a report on Sept. 25 discussing the development of internet technologies. The report noted that with the development of Internet technology, digital currencies such as Bitcoin stand out as unique and non-replicable. The report noted that among a sea of virtual currencies, Bitcoin is different and unique from the rest of the digital assets.

The report also shed light on some of the unique properties of Bitcoin including its relative scarcity and property attributes. The report noted that Bitcoin inherits key currency features such as scalability, ease of circulation, storage, and payment. Bitcoin continues to see global usage despite its decentralised nature and lack of central authority administration.

The latest judicial report acknowledging Bitcoin and its attributes as an asset class gives Bitcoin and other digital currencies in China more legitimacy. Despite a blanket ban on cryptocurrencies in China, legal arguments for defining bitcoins as personal property have gained a lot of traction from the local Chinese courts.

The latest recognition from one of the key courts in Shanghai comes despite the hostile attitude of Beijing towards Bitcoin. China imposed a blanket ban on all forms of cryptocurrency activities including Bitcoin mining in 2021. However, several courts in China over the years have recognized Bitoin and other digital assets as legal properties protected by law.

As Cointelegraph reported earlier this month, a People’s Court in China released a report assessing the legality of virtual assets and analyzing the criminal law attributes of these digital assets. The report observed that digital assets qualify as legal property and thus are protected by the law.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

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mBridge CBDC project preparing for new members, launch of minimum viable product

September 25, 2023 Coin Telegraph

BIS

The project now includes central and commercial banks of China, Hong Kong, Thailand and the UAE. Future new members were not identified.

Project mBridge may soon see significant expansion, according to Hong Kong Monetary Authority (HKMA) CEO Eddie Yue. He outlined the plans for the central bank digital currency (CBDC) project in a speech in Shanghai.

Yue said tests have shown mBridge to provide faster, cheaper and more transparent cross-border payments. The project was initiated in 2021 with the participation of the HKMA, and the central banks of China, Thailand and the United Arab Emirates, as well as commercial banks from each of those jurisdictions and the Bank for International Settlements Innovation Hub (BISIH).

Now mBridge will expand and be commercialized. Yue said:

“We are expecting to welcome more fellow central banks to join this open platform. And very soon we will launch what we call a minimum viable product, with the aim of paving the way for the gradual commercialisation of mBridge.”

Central banking officials connected with the project have said previously that a central bank does not have to have its own CBDC to participate in it. All of the current participants have CBDCs at the stage of pilot projects. The only countries that have launched CBDCs are the Bahamas, Jamaica and Nigeria, according to the website cbdctracker.org.

mBridge’s progress has already been noticed in the United States Congress. Ranking member of the House Financial Services Committee Maxine Waters expressed her concern during the markup of Representative Tom Emmer’s CBDC Anti-Surveillance State Act on Sept. 20 that the project could be leveraged to evade economic sanctions. The key to effective sanctions evasion by CBDCs is adoption, experts say.

*Commercial banks participating in Project mBridge. Source: BISIH*

mBridge is the only international CBDC project China has taken part in. Its digital yuan is by far the world’s largest CBDC pilot, and the People’s Bank of China has made several deals with international companies and commercial banks to further the adoption of the digital yuan. Thus, BNP Paribas China and DBS Bank China have made integrations with the digital yuan available to their corporate clients in 2023.

Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, was appointed to a key post at the Bank for International Settlements, a top international financial institution backed by most of the world’s central bank https://t.co/ZY7a78gFBL
— Caixin Global (@caixin) September 14, 2023

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Digital yuan integration introduced to Chinese business air travel

July 21, 2023 Coin Telegraph

CBDC

The Civil Aviation Administration and China Merchants Bank said passengers will be able to utilize the digital currency to access new services via this platform.

As the pilot program for China's central bank digital currency (CBDC), the digital yuan, takes off, Chinese business travelers will reportedly be able to pay for flight tickets using the new currency.

A collaboration between China Merchants Bank, a commercial banking firm and the Civil Aviation Administration led to the introduction of an e-CNY platform, aiming to facilitate transactions for travelers in the aviation network, the China civil aviation news agency said in a report.

According to the agency, the newly introduced platform enables companies and entrepreneurs to utilize the digital yuan for convenient payment of business air tickets. Additionally, passengers will have the opportunity to utilize the digital currency to access new services via this platform.

China Travel Service, a travel firm based in Suzhou, has already made use of the platform to purchase tickets on behalf of its clients, the report said.

At the inauguration event marking the platform's official launch, on July 18, both the Civil Aviation Administration and China Merchants Bank called for more use cases for the digital yuan and said they would collaborate in exploring the digital yuan's application in diverse areas of the civil aviation industry.

According to the report, the People's Bank of China (PBoC), the central bank, has been actively encouraging the use of the digital yuan in China's transportation network. Notably, Beijing Daxing International Airport and Beijing Capital International Airport announced their partnership for a cargo-related digital yuan initiative in 2022.

Likewise, in line with the digital yuan's integration efforts, railway networks, light rail connections and metro systems in the pilot zone have been upgraded to facilitate seamless digital yuan payments, independent of power or network connections. Furthermore, bus routes within the zone now also accommodate digital yuan payments from passengers. Also, earlier this year, several highway toll booths within the pilot zone started accepting the digital yuan as a payment method.

Remarkably, the city of Shenzhen disclosed that nearly 36 million digital yuan wallets have been opened by its residents and more than seven million new wallets have been created since the start of this year. This ongoing growth of the CBDC pilot program across diverse sectors reflects China's determination to transform its economy by fostering widespread adoption of the digital yuan.

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