BIS Invites Private Firms to Join Its CBDC Project

Project mBridge has announced the start of the MVP phase. The article has reported that BIS has sent invitations to private firms as a way to find innovative use cases and unique solutions for the development of the platform and showcasing the real potential of the project.

It is important to note that the initiative involves multiple CBDCs started by the Bank for International Settlements (BIS). The private sector is set to partake in transforming the prototype into a minimum viable product (MVP).

BIS Innovation Hub

The mBridge project has been operating since 2021 under the supervision of the BIS Innovation Hub. Central Bank of Thailand and UAE are also parties to the project in addition to China and Hong Kong. Later, 26 member nations joined the project as observing members.  

Commercial and Central banks that are conducting experiments with CBDCs are working on fixing issues with inefficient cross-border payments, high fees, slow speed, and operational challenges.

The ultimate aim of the project is to become a universally accessible multi-CBDC platform. mBridge participants have collaborated to work on creating a platform that allows its native blockchain to response in real-time, support p2p payments, process cross-border transactions, and carries out foreign exchange.

The plan to launch mBridge into the MVP stage was first revealed by Eddie Yue, the CEO of the Hong Kong Monetary Authority.

The Growth Potential of mBridge

Briefing the media about the development aims of mBridge project, the CEO noted that the firm is working on onboarding additional Central Banking firms to be added to the open platform.

He further revealed that the deadline for a minimum viable product has drawn closer with the gradual institutionalization of mBridge. The article indicates that mBridge has the ability to handle real-world payments and also technically aligned with Ethereum Virtual Machine.

A BIS report published regarding mBridge shows that Central banking firms around the globe are on their way to adopt AI solutions as a way to ensure cybersecurity.

The report further stated that more than 71% of Central banking firms are already working with generative AI while the 26% have added AI technology solutions in their future development plans for the next two years.

The article further indicated that generative AI solutions have assisted central banking organizations in improving their cybersecurity efficiency. At the same time, the financial firms have been able to detect and intercept suspicious attacks and anomalies.

However, the most concerning demand among Central bank is still rising cost that is part of the implementation of generative AI tech.

Investor Tim Draper Advises Startups to Manage Financial Risks with Bitcoin

Tim Draper, the venture capitalist has advised startups to use Bitcoin as a way to hedge their financial risks. He was speaking at the AIM Summit organized in London in April.

Speaking on the matter of reserve-related risk, he highlighted that during the Silicon Valley Bank crisis, he found out that various firms in his portfolio had placed their entire reserves into one financial institution.

He further stated that one-third of the firms on their portfolio were only associated with Silicon Valley Bank. He noticed that the government bailout package helped the struggling firms in getting out of the financial emergency at the time but reserve-related risk for startups and financial firms is always a real threat. To counter this issue, he advised the firm to diversify its holdings using Bitcoin.

According to the interview of Danny Chong with Tranchess co-founder big tech firms have a strong treasury. He further reported that a portion of company capital may be invested in high-interest bearing products, treasury management, and plenty of liquidity.

Further speaking on the matter, Draper noticed that firms should dedicate only a third of their overall reserves in a big bank and place the other one-third portion in a relatively smaller bank since they are backed by the US government. He concluded by adding that the remainder one-third of the company holdings should be invested in Bitcoin.

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