Detailed Technical Exploration of the mBridge Project

mBridge is a multi-CBDC (wholesale) platform for cross-border payments and foreign exchange settlements in central bank digital currencies. Originating from Project Inthanon-LionRock (HKMA + Bank of Thailand, 2019), it expanded in 2021 with the Digital Currency Institute of the PBoC and the Central Bank of the UAE, coordinated by the BIS Innovation Hub Hong Kong. Saudi Arabia (SAMA) joined as a full participant. The BIS exited at the end of 2024 (“graduation”), leaving the project to the participating central banks. Main objectives: instant settlement (seconds), reduced costs, elimination of settlement risk through atomic Payment-versus-Payment (PvP), partial bypass of the correspondent banking/SWIFT model, and preservation of each central bank’s monetary sovereignty.

Fundamental Technical Architecture

A core component of the mBridge system is the mBridge Ledger (mBL), a permissioned and private blockchain designed by and for central banks. It is compatible with the Ethereum Virtual Machine (EVM), allowing smart contracts to be written in Solidity. Initially based on Hyperledger Besu experiments, it was developed into a native, optimized ledger with a modular “Lego brick” design for flexibility, scalability, and jurisdictional compliance. The network topology features central banks operating validator nodes in a fully connected graph. Commercial banks connect through their respective national central bank via a domestic onboarding process, ensuring each central bank retains full control over the issuance, redemption, and monetary policy of its own CBDC. Functionally, the system is divided into layers: the Blockchain/Core layer (smart contracts, consensus protocol, key-value database); the Frontend layer (interfaces and APIs for central and commercial banks); and the Backend/Applications layer (business logic, compliance, reporting). The consensus protocol uses HotStuff+ or Dashing, a Byzantine Fault Tolerant (BFT) algorithm. This offers linear complexity with the number of validator nodes, ensuring good scalability, and achieves a very short finality time (seconds). Key mechanisms include atomic PvP settlement, where both legs of a foreign exchange transaction settle simultaneously or not at all, eliminating Herstatt risk. Smart contracts manage CBDC issuance and redemption, programmable compliance rules (sanctions, limits, AML), and automation of certain functions. Privacy is maintained through pseudonymous addresses and encryption of payment metadata. Interoperability is supported via APIs based on the ISO 20022 standard, and the system supports the Legal Entity Identifier (LEI).

A central bank issues its wholesale CBDC on a shared ledger. Commercial banks in that jurisdiction can hold and transfer this CBDC. A bank in jurisdiction A can directly pay a bank in jurisdiction B using B’s CBDC (or through atomic FX conversion). Settlement is final, in central bank money, without correspondent intermediaries. The model enables 24/7 peer-to-peer payments with near-immediate finality. As of 2026, pilots in 2022 processed over 160 real transactions worth over $22 million. Cumulative reported volumes total several tens of billions of dollars, largely dominated by e-CNY (~95% in some periods). Very large individual transactions have been reported (e.g., >$1.7 billion in 2026). The system has reached a commercial/MVP phase, with numerous observers (over 25-30 institutions). Technical strengths include speed and atomicity, sovereign control by each central bank, structural reduction of correspondent frictions, and programmability (on-chain compliance). Limits and challenges include FX liquidity on the ledger (especially for illiquid pairs), complex multi-party governance, current concentration on e-CNY, scalability and cyber resilience issues at large scale, and interoperability with traditional domestic systems and other multi-CBDC platforms.

mBridge is currently the most operationally advanced multi-CBDC wholesale platform. It serves as a major technical reference for BRICS discussions on the interoperability of CBDCs and instant payment systems, even though it remains distinct from a potential purely BRICS architecture.