China Setting up mBridge against US Swift Ban

[Doan9269]

What is the plight of China in it decision which table down the removal of US banks and the swift ban in other to engage partnerhip with the Bank of the International Settlement while signing a contract of creating mBridge that will allow them make a digital payment platform which allows them to evade the swift ban from US.

What could this implies?
What could be the possible implications?

https://twitter.com/BitcoinNewsCom/status/1689946392754614275?t=0WEtngSgQ6RS0YoN4JgkKw&s=19

[Yogee]

For those wondering what is this mBridge https://www.bis.org/about/bisih/topics/cbdc/mcbdc_bridge.htm

Project mBridge: Connecting economies through CBDC

Another de-dollarization? Maybe. China and US may be having their proxy wars but they still continue to trade so I wouldn't put too much politics on this move yet. It could only be a matter of time before US have their own CBDC and join those countries.

[Zlantann]

MBridge is a payment system that facilitates the use of China’s Digital Yuan and other Central Bank Digital Currencies (CBDC) for international trade. For now, the mBridge system will be used for making and receiving payments from China, Thailand, Hong Kong, and the United Arab Emirates.

What could this implies?

It means that these nations connected to MBridge will be able to bypass the US and European-controlled international payment systems to make payments. It will reduce the reliance on western controlled payment systems.

What could be the possible implications?

The effect is that if sanctioned nations are admitted to the platform they will be able to invade sanctions. It will also make the global financial system competitive because nations will have alternatives to SWIFT. It will also reduce the reliance on dollars and promote cheaper and faster trade relationships among nations.

[Nwada001]

What could this implies?

It implies that the Chinese government is not ready for any form of sanction to jeopardize their international trade. Whichever country (local currency) has an issue with the Swift still has the chance of trading with them without being affected by the sanction, as the Chinese yuan, which they have also successfully launched in its digital form (CBDC), is ready to be used as a medium of exchange without the help of the Swift; instead, it can be inter-exchanged with any country that also has its own local currency digitalized.

What could be the possible implications?

I don't think there is going to be any form of implication for such action, as the country has the right to decide on which currency will be used and accepted on their International market, and they also made it very possible and easier for their international customers with their new development.

[Faisal2202]

Well, i am not a big fan of news and economic events but i think they are just attempting dedolarization. Because first they came up with BRICS and now the mBridge which is nothin but a CBDC system for Chinese and other related and friendly countries to avoid the systems means banks provided by US.

What could it implicated other than dedolarization. But of course they are not going to admit it instead they will say we are going to adopt new era of technology and going to unlock new doorways for us to groom more in the world of Finance while become more independent and risk and scam free.

[sunsilk]

I think I get it now on why did China first tested its CBDC even if it doesn't sound good that it's coming from them. They're the one that have been banning Bitcoin and ICOs before and there were tons of news from them a couple of years ago.

But with this mBridge, I think it all make sense that they're trying to skip on some major trades in order for them to overtake this sector.

We shall see if this is going to work well for most of the countries that are involved on this especially for China.

[Gyfts]

The obvious implication is it will allow for countries to circumvent U.S. sanctions but that's predicated on how willing a country is willing to adopt yuan. The Chinese economy, contrary to what people might believe, is unstable and dwindling; thus by proxy, yuan is too. Would countries be more willing to hold yuan oppose to USD? Perhaps if they had no choice, it's an attractive alternative.

[letteredhub]

The obvious implication is it will allow for countries to circumvent U.S. sanctions but that's predicated on how willing a country is willing to adopt yuan. The Chinese economy, contrary to what people might believe, is unstable and dwindling; thus by proxy, yuan is too. Would countries be more willing to hold yuan oppose to USD? Perhaps if they had no choice, it's an attractive alternative.

States that not in at par with the USA would be very ready to adopt the Chinese yuan against the dollar so long as the decision creates a pathway for them to circumvent whatever U.S  economic sanctions putting a hold on them.  Russia, Saudi Arabia, Afghanistan and Iran IMO are countries that are likely to adopt the Chinese yuan as they have been the few countries that are supportive of dedollarisation campaign in recent times.

[coupable]

In any case, I do not think that the launch of this bridge is intended to bypass the Swift system, unless China expects it to be canceled, as happened with Russia, or that it intends to take steps in the future that may force its enemies to cancel it from Swift. The idea is that as long as this happened with Russia as a pressure card, it could happen with China as well in the context of the war between it and the United States. I do not expect China to be removed from the Swift system, because despite the proxy struggle against the West, exchanges with China have not stopped, and I do not expect them to stop.
What I find remarkable about this bridge is that three countries are ready to use it, and that these countries are considered among the global economic centers in addition to China. This will open the way for many other countries to participate.
This bridge project is to weaken the role of the dollar and not to avoid exclusion from the Swift system.

[joniboini]

Would countries be more willing to hold yuan oppose to USD? Perhaps if they had no choice, it's an attractive alternative.

I'm not sure how the government handles their payment, but is it not possible for them to just convert to Yuan on the fly when they want to use this payment network? If this is possible I can see they buy USD and then hold it for some time, then convert it to Yuan when the needs arise. Obviously, if it is for large volume payments then things can be troublesome. Suffice to say countries with terrible US relations would likely be eager to use this more than others.

[blckhawk]

Another de-dollarization? Maybe. China and US may be having their proxy wars but they still continue to trade so I wouldn't put too much politics on this move yet. It could only be a matter of time before US have their own CBDC and join those countries.

China's fed up that the war on Ukraine by Russia has been so long than what Russia has promised so they have to stretch their legs out and do some moves. I wouldn't say that it's another de-dollarization though I don't think that China making yuan an international currency for trade is favorable to them, iirc China doesn't like uncontrollable risks and their plan for de-dollarization would fall under that kind of risk. I don't know about US creating their CBDC though, I'm pretty sure that they still have a firm grip on international trades given that their still the preferred currency when it comes to that, and the Federal Reserve won't like the idea that they can't print more dollars anymore if CBDC in US is considered.

[icalical]

I have nothing against swift US or EU, but I think this mBridge is a good thing for other country. Not to say that china dominating economy will be better than US but at least now we will have option, the US won't be a single super power. The worst thing could happened is that China might be finally won't be afraid to poke on Taiwan, if they succeeded in expanding this mBridge and lead the economy with Yuan, which if that actually happened I will very much regretting saying that mBridge is a good thing.

[Gyfts]

The obvious implication is it will allow for countries to circumvent U.S. sanctions but that's predicated on how willing a country is willing to adopt yuan. The Chinese economy, contrary to what people might believe, is unstable and dwindling; thus by proxy, yuan is too. Would countries be more willing to hold yuan oppose to USD? Perhaps if they had no choice, it's an attractive alternative.

States that not in at par with the USA would be very ready to adopt the Chinese yuan against the dollar so long as the decision creates a pathway for them to circumvent whatever U.S  economic sanctions putting a hold on them.  Russia, Saudi Arabia, Afghanistan and Iran IMO are countries that are likely to adopt the Chinese yuan as they have been the few countries that are supportive of dedollarisation campaign in recent times.

Russia does not have a choice but to adopt Yuan. They've been excluded from using USD due to sanctions. Countries that have the liberty of choosing between USD and Yuan might have some of their currency reserves be in both. As far as conducting bilateral trades, Yuan is a weaker alternative compared to USD unequivocally. Saudi Arabia, Afghanistan, and Iran are all "unfriendly" to the U.S. so they would benefit from something like this. Though for China to benefit, they would need large transactional volumes. These countries don't have the GDP to conduct transactions in large volumes.

[mvdheuvel1983]

I hope we know that what China is doing is giving the US the middle finger
It was BRICS and now well-thought-out alternative payment system for cross-border transactions solely aimed at reducing Western influence and creating a better represent emerging market economies.
What are the implications?
- a decline in the value of the US dollar which would affect its dominance in global financial transactions thereby impacting US and EU economies.
- a decrease in the ability of the US and EU to enforce economic sanctions thereby shift global power dynamics towards emerging economies like China and Russia.

[so98nn]

What could this implies?
What could be the possible implications?

This implies nothing. This is just another experimental project by the CBDC in an effort to increase borderless transactions and bring businesses closer than before. This also helps the CBDC to keep a close eye on monetary situations in various countries or those using the Bridge since all the transactions are happening under their jurisdiction.

Since we are in a crypto space we will consume this news as some sort of negativity about Bitcoin but in reality, it is not. They might not be implying anything with this neither to Bitcoin nor to any other form of payment.

Project mBridge experiments with cross-border payments using a custom-built common platform based on distributed ledger technology (DLT) upon which multiple central banks can issue and exchange their respective central bank digital currencies (multi-CBDCs).

This more or less seems to be lowering the burden on various central banks when they do such heavy transactions. The import-export-associated transaction could range from millions to billions of dollars. Since it is centralized transaction it takes time at the back end to tally every penny thus to reduce that dead space it could be just another project they have taken in association with various Governments.