Let’s mBridge the gap: India mustn’t stand aloof as new digital payment mechanisms emerge

The West Asia escalation has brought back into focus a structural vulnerability that has long remained underappreciated in policy discourse. Energy flows translate into payment flows, and both are now increasingly mediated by financial architectures that reflect geopolitical reality as much as economic logic. These are not passive conduits, as they can shape outcomes—by enabling, delaying or, in extreme cases, constraining the movement of money across borders.At the heart of this evolving dynamic lies mBridge, an initiative incubated under the Bank for International Settlements (BIS) for interoperability among multiple central bank digital currencies (CBDCs).

The BIS left the project in 2024.What began as a technical exploration has acquired unmistakable strategic overtones. Unlike existing systems such as Swift, which facilitate communication between banks, mBridge is designed to enable integrated settlements of dues.Built on distributed ledger technology, it lets participant central banks transact directly with one another in real time—with finality and without recourse to the layered correspondent banking chains that are typically anchored in dollar clearing. This distinction reflects the changing nature of monetary power.

The prevailing dollar-centric global system has historically provided efficiency, liquidity and scale. Yet it has also demonstrated that access to its clearing mechanisms is neither automatic nor unconditional. Recent years have shown how financial infrastructure can be used as a policy instrument to impose sanctions, freeze foreign-exchange reserves and exclude some actors.