mBridge project accelerates CBDC adoption amid global financial shifts

The mBridge project, supervised by the Bank of International Settlements, has garnered vast media coverage. mBridge features an Ethereum-compatible blockchain, the mBridge Ledger, which enables smart contracts to automatically initiate financial transactions and instantaneously connect digital wallets with wholesale central bank digital currencies (wCBDCs) across various countries.

As a cross-chain solution for CBDCs, typically built on distinct distributed ledger technologies, mBridge has fostered international collaboration over its nearly four-year existence. The project has united the efforts of the BIS Innovation Hub, the central banks of the UAE, China, Thailand and the Monetary Authority of Hong Kong.

This year, the Saudi Central Bank joined as a participant, with over 26 countries expressing interest in tracking the project’s development. Since the start of the year, at least three additional central banks have joined the monitoring group. mBridge’s capabilities have been successfully tested multiple times, including on January 29, 2024, when the UAE sent a payment in its digital dirham to China, with 50 digital AED (equivalent to $13.6 million) successfully reaching the designated recipient.

The success of mBridge has catalysed the development of the digital dirham strategy, unveiled on March 23, 2024. By June 23, 2025, the UAE plans to scale up its use of mBridge, focusing on expanding CBDC transactions with its primary trading partner, India, and paving the way for the eventual launch of digital AED within the country.

A key implication of mBridge’s current phase is its acceleration of practical CBDC adoption in the UAE. However, a global challenge remains: identifying a niche in the financial system where CBDCs cross-border movement, facilitated by mBridge, can experience rapid growth. To date, CBDCs have not significantly impacted world trade. In contrast, daily SWIFT transactions reach $16 trillion, with the USD remaining a cornerstone of global finance despite the absence of a digital dollar. Moreover, on May 23, 2024, the US House of Representatives passed the CBDC Anti-Surveillance State Act, which, if approved by the Senate, will preclude the launch of a digital USD.

Meanwhile, the traditional greenback maintains its dominance in global finance, with dollar payments on SWIFT hitting an all-time high and accounting for 48.03% of transactions. However, CBDCs could gain significant traction, but not in the way many anticipate. The full potential of mBridge and similar initiatives, such as Aber, Dunbar, and Mariana, will be unlocked when AI beings leverage them for cross-border transactions.

I use the term “being” rather than “robot” because AI-based systems inherently strive for independence from humans and are succeeding. They continue to invent new things. In the US and EU, AI systems are currently not recognised as inventors under patent law, but this will likely drive AI inventors to explore the potential of NFTs as an alternative to the traditional patent registration system shortly.

Within countries, human-like AI systems will utilise cryptocurrencies, including NFTs, and crypto will become a financial instrument for AI entities, analogous to fiat money for humans. Crypto transactions between AI entities will become commonplace, particularly if a pro-crypto US president is elected in November. These elections are significant as the world tracks trends emerging in the US, many of which are being adopted in most countries.

Many observers believe that crypto has not fulfilled its promise. However, they miss the point. The legacy financial system of the world will never allow crypto to challenge its pillars. Moreover, the launch of Bitcoin futures in the US in 2017 and the introduction of Bitcoin and Ethereum ETFs in January and July of this year, respectively, can be seen as a move to harness crypto’s potential for humans by channelling it into the world of financial derivatives and speculative trade. Meanwhile, the imminent rise of AI-driven systems and their pursuit of large data centres, including those used for Bitcoin mining, is not coincidental.

National regulators will promote CBDCs in cross-border transactions involving AI beings in various countries. CBDCs, by design, operate on blockchains controlled by country-specific banking regulators, enabling oversight of AI beings’ transactions. At the same time, human-led entities and people continue to transact primarily via SWIFT, a system that effectively allows the implementation of KYC and AML regulations.