The Bank for International Settlements is considering the possible shutdown of a cross-border payments platform that Russia can use to circumvent Western sanctions.
Points of attention
- The Bank for International Settlements is considering shutting down the mBridge cross-border payments platform, which Russia utilizes to circumvent Western sanctions.
- The mBridge project, developed by the central banks of China, Thailand, Hong Kong, and the UAE, faces potential closure, impacting Russia's ability to make international financial transactions.
- Putin suggested creating a similar platform for BRICS economies to become independent from the US-controlled financial system in response to the possible shutdown of mBridge.
- The closure of the mBridge project may influence participating central banks' use of the technology for cross-border payments.
- The reluctance of the Bank for International Settlements to work with countries under sanctions raises concerns about the future of mBridge and its impact on global financial transactions.
What is known about the probability of depriving the Kremlin of a promising mechanism for circumventing Western sanctions
According to the publication, the mBridge project aimed at enabling cross-border payments without the participation of American banks may be closed.
In particular, this issue was discussed by the heads of Central Banks and the heads of the Ministries of Finance of Western countries.
We cannot directly support any project for BRICS, because we cannot work with countries that are subject to sanctions, — explained the general director of the Bank for International Settlements Agustin Carstens.
It is noted that the US is increasingly using the dollar as a key factor for conducting international financial transactions for the introduction of sanctions against countries such as Russia.
This forced the Kremlin to look for alternative ways of making payments in settlements during trade transactions with partners.
What is known about mBridge cross-border payment platform
The mBridge platform was developed by the central banks of China, Thailand, Hong Kong and the UAE as part of the Innovation Center of the BMR and recently reached the stage of "minimum viable product", which allows testing it in real conditions.
The UAE Central Bank reported that in January, the first cross-border payment in "digital dirhams" worth 50 million dirhams ($13.6 million) was sent to China through mBridge. The fact that China has provided a key technological basis for the platform heightens the apprehensions of Western politicians.
At the BRICS summit, Putin suggested creating a "bridge" for the group, which would be based on technology comparable to mBridge.
According to him, this will enable their economies to become independent from the financial system under US control.
It is currently unclear whether the closure of the mBridge project will effectively stop participating central banks from using the technology.
