MNI: mBridge Will Promote Cross-border Asia Payments - PBOC's Zhou
Asian countries must enhance their cooperation with digital currency Project mBridge to improve cross-border payments and prevent difficulties arising from insufficient U.S. dollar liquidity or policy inconsistencies with the Federal Reserve, said Zhou Xiaochuan, former governor at the People’s Bank of China, at Sibos 2024 in Beijing.
The current U.S. dollar-denominated cross-border payment systems are unable to meet the needs of intra-Asian trade, travel, and the digital economy's development, he said, adding mBridge will help drive current account transactions, especially smaller ones, suitable for Asian countries.
The dollar's reserve currency and international trade settlement status will largely depend on whether the Fed can provide sufficient liquidity in overseas markets and the safety of dollar-dominated assets, he added.
Payments over mBridge will not rely heavily on traditional telecommunication systems like Swift for small-scale current account transactions, such as in cross-border e-commerce, he said. Hopefully, Swift will continue to strengthen its governance and neutrality, he added. (See MNI INTERVIEW: China Yuan To Find Support in H2)