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Saudi Arabia Joins mBridge CBDC Project, Digital Oil Trade

CBDC | Jun 17, 2024

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Saudi Arabia Joins BIS-Led Central Bank Digital Currency Project

As reported by Reuters, Saudi Arabia has become a member of the BIS-led, China dominated, project mBridge, creating a cross-border payments platform using digital currencies (CBDCs) that is managed by many central banks. The goal of this project is to improve the speed, affordability, and transparency of international transactions involving China, Hong Kong, Thailand, and the United Arab Emirates. With Saudi Arabia involved, the transition away from the US dollar and toward the "petroyuan" foreshadowing the adoption of CBDCs for oil transactions, particularly with China.

A Change in International Oil Trade

According to Rich Turrin, Saudi Arabia would be able to sell oil to China and create the petroyuan through instantaneous, low-cost cross-border cash transactions made possible by Project mBridge. This change is a part of a larger trend that uses CBDCs from BRICS and other countries in the global south, which may lessen the US dollar's dominance in international trade.

See: 

SWIFT Launching CBDC Solution Within 2 Years (to Compete with BRICS)

IMF Working on Global CBDC Platform to Revolutionize Global Remittances and Trade

Project mBridge, launched by the BIS in 2021, aims to revolutionize cross-border payments using distributed ledger technology. The project has reached the "minimum viable product" stage, readying it for real-world testing. It promises near-instant, low-cost transfers and could significantly impact traditional systems like SWIFT, offering an alternative for countries under sanctions​.

And International Trade

It is anticipated that the use of CBDCs and platforms such as mBridge will improve the security of national payment systems, modernize payments, and expand financial inclusion. mBridge has the potential to usher in a new era of financial transactions for international trade by upending SWIFT's monopoly on cross-border payments, which would save costs and increase efficiency.

Closing

The involvement of Saudi Arabia in Project mBridge is a turning point in the development of international finance and could see a move away from the US dollar and the rise of the petroyuan.


NCFA Jan 2018 resize - Saudi Arabia Joins mBridge CBDC Project, Digital Oil TradeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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