Chinese tech giant Tencent (NASDAQ: TCTZF) will participate in the cross-border wholesale central bank digital currency (CBDC) project mBridge at the minimum viable product (MVP) stage.
Tencent is one of the few non-bank companies from China that participated in mBridge, a cross-border CBDC project involving China, the United Arab Emirates, Thailand, Hong Kong, and most recently, Saudi Arabia. The Bank for International Settlements (BIS) has been coordinating the project, which is one of the most advanced CBDC pilots globally.
Tencent participated through Tenpay Global, its domestic payments platform, and WeBank, its digital banking subsidiary. The firm, which owns China’s largest digital payments platform, WeChat Pay, has been participating in mBridge since September last year.
Launched in 2021, mBridge uses blockchain technology, known as the mBridge Ledger, to offer real-time, peer-to-peer cross-border payments and foreign exchange transactions. The BIS announced this month that the project had entered the MVP stage, admitted Saudi Arabia as the newest full member and raised its observing members to 26.
Tencent followed this up by announcing that it would be among the participants in the MVP stage.
“As Tencent’s cross-border payment platform, Tenpay Global provides a validation use case based on cross-border e-commerce export trade payment collection for Tencent’s participation in Project mBridge at the MVP stage,” stated Royal Chen, the tech firm’s Vice President of Financial Technology.
With mBridge’s blockchain solutions, Tencent showcased advantages in both cost-effectiveness and efficiency of cross-border payments, Chen said.
“Capitalizing on the highly efficient and cost-effective features of mBridge, this approach aims to further explore the practical implementations of mBridge to address the pain points of cross-border payments,” he added.
Tencent is one of nine Chinese financial entities that participated in mBridge. Others included the country’s largest banks, such as ICBC, the Bank of China (NASDAQ: BACHY), the Agricultural Bank of China (NASDAQ: ACGBY) and the China Construction Bank (NASDAQ: CICHY). The China Foreign Exchange Trade System, the country’s electronic trading platform, also participated.
mBridge feeds into China’s ongoing CBDC efforts. The cross-border channels are connected to the digital yuan network, allowing Chinese participants to settle all transactions in the CBDC.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs are more than just digital money
