Tencent is one of nine institutions that has participated on the Chinese side of the mBridge cross border central bank digital currency (CBDC) solution that recently launched a minimum viable product (MVP). Tencent owns WeChat Pay, China’s largest mobile payment app with 1.1 billion monthly active users.
mBridge leverages wholesale CBDCs from the central banks of China, Hong Kong, Thailand and the UAE, with Saudi Arabia joining earlier this month. The BIS Innovation Hub coordinates the project and aims to enable cheaper, faster cross border payments.
In Tencent’s case, its cross border payments arm Tenpay Global is the mBridge participant. It tested a use case involving receiving trade payments for e-commerce exports.
Meanwhile, China is responsible for the technology architecture of DLT-based mBridge. While other countries can choose to connect their real time payment systems (RTGS), China has integrated its domestic CBDC, the pilot eCNY. Hence, all incoming and outgoing funds are settled in eCNY.
Nine Chinese institutions participated in trials ahead of the MVP launch. China’s big four banks ICBC, Agricultural Bank of China, China Construction Bank and Bank of China were involved alongside Bank of Communications, Postal Savings Bank, Industrial Bank and the China Foreign Exchange Trade System.
Tencent was one of the first private firms to participate directly in China’s domestic digital RMB pilot. Relatively few banks are directly connected to the main CBDC system, with most connecting via other banks. China first onboarded six state banks, followed by Tencent’s WeBank and Ant’s MyBank.
