mCBDCs and DLT Reshape Cross-Border Settlement

Cross-border payments still rely heavily on correspondent banks, Nostro/Vostro accounts and fragmented settlement systems, leaving transfers to take two to five business days and fees at roughly 3% to 7% of transaction value. Multi-central bank digital currency platforms paired with permissioned distributed-ledger technology offer an alternative: wholesale CBDCs can move on a shared ledger, while smart contracts execute payment and foreign-exchange legs atomically. The model could cut reconciliation work, counterparty risk and the capital tied up in prefunded accounts.

A July 28, 2026 report highlighted Project mBridge, launched in 2021 by the BIS Innovation Hub’s Hong Kong Centre with the Hong Kong Monetary Authority, Bank of Thailand, People’s Bank of China’s Digital Currency Institute and Central Bank of the UAE. The platform reached minimum viable product status in mid-2024, when the Saudi Central Bank joined as a full participant. The report said mBridge had five full members and more than 27 observers, with demonstration transactions settling in under 10 seconds at about 0.1% cost, versus 3% to 5% through traditional channels.