Last month, an international institution that is barely known outside central banker circles released a report that should concern all U.S. policymakers seeking to preserve U.S. influence in the global financial system. The Bank for International Settlements (BIS), an organization based in Switzerland that facilitates cooperation and policy support among central banks, published an overview of a pilot project with geopolitically destabilizing implications. The project offers a glimpse of how countries eventually may conduct large-scale international trade without going through conventional banking channels—channels that currently hinge on U.S. financial institutions and access to the U.S. dollar.
The project, called mBridge, is a blockchain technology pilot supporting “real time, peer-to-peer, cross-border payments and foreign exchange transactions using CBDCs [central bank digital currencies].” The peer-to-peer feature mentioned here is for banks. These transactions are “wholesale” payments between large financial institutions rather than retail payments involving individual consumers. Still, the platform is a “bridge” wher
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