The Bank for International Settlements is considering ending a cross-border payments platform that has drawn attention from the Russian president as a potential means to bypass U.S. sanctions.

The Future of mBridge Cross-Border Payments Project

The Bank for International Settlements (BIS) is reportedly debating the future of its mBridge cross-border payments project after Russian president Vladimir Putin highlighted the technology as a tool to evade Western sanctions and challenge the dominance of the U.S. dollar. This information comes from sources close to the matter.

Discussions about potentially shutting down the project took place last week during the IMF and World Bank annual meetings in Washington, according to insiders.

mBridge Project Details

The mBridge project aims to enable direct digital transfers between central banks without relying on U.S. financial institutions. It was developed under the BIS Innovation Hub with participation from central banks in China, Thailand, Hong Kong, and the United Arab Emirates.

The BIS has promoted the initiative as a means to streamline cross-border transactions while potentially bypassing the current dollar-centric global financial infrastructure.

BRICS Members and Dollar Alternatives

At the Group of 30 event in Washington on October 26, BIS General Manager Agustín Carstens emphasized that “we cannot directly support any project for the BRICS because we cannot operate with countries that are subject to sanctions — I want to be very clear about that.”

Despite the dollar’s entrenched role in global trade, Putin has advocated for alternative systems. In recent remarks at the BRICS summit in Kazan, he proposed creating a “BRICS Bridge” network similar to mBridge to facilitate trade within the bloc without relying on the dollar. This notion has received mixed reactions from BRICS members, with nations like India and South Africa showing reluctance to disrupt the existing global financial order.

Potential Outcomes and Concerns

If the BIS decides to withdraw from mBridge, several participating central banks might continue with the project independently, sources suggested. However, Western policymakers remain wary of China’s influential role in the platform’s development and its potential to bypass established financial channels.

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