0 sats \ 6 replies \ @Solomonsatoshi 9 Nov \ on: The BRICS Are a Scam and Will Never Beat the Dollar econ
https://www.ledgerinsights.com/bis-hands-over-mbridge-cbdc-payment-system-after-brics-controversy/
https://www.iol.co.za/news/politics/opinion/cross-border-payments-for-brics-and-africa-chinas-innovation-leading-the-way-6ea7296e-4375-47b8-bb1c-041ba0d395fb
Thanks for posting some weekend reading. Dont' know if I can stomach the YT.
Is the TLDR that BIS/China is considering opensourcing mbridge tech-stack so that the e yuan may oneday integerate with SWIFT, making it extensible and hackable for other governments, one day? lol
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No.
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So, mbridge is a central bank payments or remitance system and can connect with existing inter-bank payments (faster payments and realtime gross settlements) and maybe SWIFT, because they are sitting on the sidelines and stand to loose out.
So, it’s a competitor to SWIFT. Undoubtedly SWIFT has had little innovation due to their exhorbitant privilage of being sole arbitrator of global settlement, and is therefore faster and more efficient in being a settlement layer, fascilitating currency swaps.
“Turning to technology, the mBridge ledger is decentralized, with central banks and commercial banks operating their own nodes, databases, and key paris. According to PBoC’s Mr Mu, who leads the technical sub committee, each bank has autonomy over its own system. Central banks participate in the blockchain consensus, but commercial banks do not.”
This part I’m not clear on, how do central banks ‘participate’.
“While part of the system is based on Ethereum, some of the technology was developed in China, including the novel consensus mechanism.”
Sounds sketch.
“The aim is to fully open source the code in the future, but for now all the central banks have access to the source code.”
More sketch.
“Banks have to pre-fund mBridge payments, whereas traditionally they relied on correspondent banks for this. Plus the banks need to manage the liquidity of both fiat currency and the CBDC..”
So, central banks need to pay in to it, in order to use. I’d imagine this is not a small deal. With the aim of expanding outside of the initial participants, to Africa’s Pan-African Payment and Settlement tiered investment System, paying into a system that is not opensource just seems sketch.
There’s quite a bit of info in the links, not sure if I missed the main thrust, but that’s my TLDR.
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China is building the base protocol/s for its alternative to SWIFT which will start with BRICS nations but will not be limited to them.
Any nation that wants an alternative to SWIFT will have the option of Chinese payments protocols.
This is already operational in terms of Russia, Iran and N.Korea who all already rely upon Chinese trade payments channels.
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Well, I guess there's the upshot.
Protocols > platforms.
Closed-source systems are still trusted systems though. Participation would suggest a joint vested interest in development of the system, i.e the protocol. Not just participation in a protocol that is permission-based.
There would have to be some rules to stop central banks flooding the system by inflating their money supply. Who will make the rules of the protocol, where is the consensus?
Interesting read.
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It looks like it will be a system that facilitates trade payments using digital representations of the various nations currencies.
Based on the Chinese CBDC as the mBridge program is.
If a nation inflates the supply of its currency then it loses value compared to the other currencies- just as happens if you are operating within SWIFT.
China will control the protocol as it developed the e-Yuan protocol upon which its being built.
This is the tertiary layer of the Belt and Road model of empire China is building.
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