- The Hong Kong Monetary Authority is preparing to expand its mBridge central bank digital currency project amid the growing push for globalization and a concerted effort by countries around the world to start transacting in currencies other than the U.S. dollar.
While global trade has slowed, Yue said that “a full-blown financial decoupling is also unlikely, given how highly interconnected the global financial system is.” He called on countries to develop “practical and pragmatic economic considerations” instead of opting for “protectionism and cross-border restrictions.”
As trade and supply chain linkages in Asia become more integrated, Yue said local currencies will become more utilized in regional trade settlement and beyond, which means that the cross-border payments infrastructure needs to become more efficient to keep up with demand. Yue said the mBridge project – which is a collaboration between the Bank for International Settlements innovation hub, the PBOC, the central banks of Thailand and the United Arab Emirates, and commercial banks from each of those jurisdictions – is a key piece in the HKMA’s plans for future expansion.
He noted that Hong Kong “recently issued the world's first tokenized government green bond,” and said the experience “offers a glimpse of the power of digitalization as an enabler of a greener, more inclusive, and more connected future.”