The multilateral central bank digital currency Bridge project has entered a new stage, ushering in new opportunities for cross-border transactions

Recently, the multilateral Central bank digital currency Bridge project announced that it has entered the minimum viable product (MVP) stage, marking the successful transformation of the project from the pilot stage to practical application landing, and the continuous expansion of cross-border transaction "circle of friends". This means that the combination of money bridge and specific application scenarios is further advanced, and the future combination with the actual business of the bank has a broader space for exploration.

The multilateral central bank digital currency Bridge project has attracted much attention since its inception. The project, jointly built by the Bank for International Settlements (Hong Kong) Innovation Centre, the Bank of Thailand (Central Bank of Thailand), the Central Bank of the United Arab Emirates (UAE), the Digital Currency Research Institute of the People's Bank of China and the Hong Kong Monetary Authority, aims to enable faster, cheaper and more secure cross-border payments and settlements through distributed ledger technology and the application of central bank digital currencies.

With the continuous advancement of the project, various pilot regions and operating institutions have announced the application and breakthrough of money Bridge in cross-border transactions. For example, Agricultural Bank of China Fujian Branch successfully handled the first Money Bridge cross-border RMB remittance business, marking the bank's successful entry into a new stage of Money Bridge enabling cross-border business; The Yongchuan branch of China Construction Bank in Chongqing successfully landed the first cross-border settlement transaction of several coins under the trade item through the money bridge, which promoted the smooth payment of imported fruit. In addition, technology companies such as Tencent have also actively participated in the pilot verification of the money Bridge project, which has improved the service quality and efficiency of cross-border clearing links.

The successful promotion of the multilateral Central bank digital currency Bridge project not only provides a new solution for cross-border transactions, but also promotes the upgrade of the cross-border payment system. Traditional cross-border payments have challenges such as high cost, low efficiency, low transparency and insufficient coverage, while the Money Bridge project has effectively solved these problems by covering different jurisdictions and currencies, exploring the application of distributed ledger technology and central bank digital currency in cross-border payments.

The currency bridge uses digital wallet design, uses blockchain and other technologies, and can efficiently connect with institutions on the bridge and synchronize settlement, providing a practical solution for the implementation of traditional cross-border payments to reduce costs and increase efficiency. Compared with traditional cross-border payment and settlement networks, the multilateral central bank digital currency bridge network can achieve point-to-point transactions, eliminate intermediate links, improve participant liquidity, reduce exchange costs, and improve transparency conducive to supervision.

The successful promotion of the multilateral central bank digital currency bridge project is also inseparable from the top-level design of central banks and the pilot exploration of operating institutions. Since the G20 initiative to improve cross-border payments was put forward in October 2020, the project has been progressing steadily. From business model research and system development and simulation testing, to the all-weather simultaneous settlement of cross-border transactions, to the successful completion of the first real transaction pilot based on four central bank digital currencies, each step has pooled the wisdom and efforts of the participants.

After entering the MVP stage, the Money Bridge project will continue to explore the combination with the actual business of banks to promote the further development and optimization of cross-border transactions. At the same time, the project will also welcome the participation of more monetary authorities, commercial banks and corporate entities to jointly promote the innovation and development of cross-border payment systems.

Looking ahead, the multilateral central bank digital currency Bridge project is expected to play a greater role in the field of cross-border payments. With the continuous development and improvement of the project, the efficiency and security of cross-border transactions will be further improved, and the cross-border payment system will be more perfect.