The mBridge blockchain, overseen by the Bank for International Settlements, seems to be struggling. Good news for Bitcoin.

Is the BIS blowing up the bridges? While the BRICS summit was taking place in Kazan, the G7 camp was meeting in Washington for the annual assembly of the International Monetary Fund.

The mBridge blockchain, overseen by the Bank for International Settlements (BIS), is reportedly facing challenges, which could bode well for Bitcoin.

According to Bloomberg, the fate of the mBridge project was discussed during the annual assembly of the International Monetary Fund (IMF) and World Bank in Washington. The project, which aims to create a new Forex system for central bank digital currencies (CBDCs), may be facing a pause in its development.

Spearheaded by the BIS Innovation Hub, mBridge is designed to facilitate instant cross-border payments and currency exchange operations. The project involves the central banks of China, Thailand, Hong Kong, and the United Arab Emirates, all of which are members or aspiring members of the BRICS group of nations.

The initiative seeks to establish an alternative to the current Correspondent Banking System, which heavily relies on the U.S. dollar and American banks. Correspondent banking entails opening an account in a foreign bank to conduct transactions in a local currency.

For instance, if a French bank wishes to hold its clients' dollar holdings, it must open an account in an American bank. The BRICS nations view mBridge as a potential avenue to restructure the international monetary system once geopolitical tensions subside.

However, Western decision-makers reportedly remain hesitant to relinquish their monopoly in the financial realm. Disconnection from global payment networks has become a key instrument in the West's arsenal.

mBridge, a distant echo of Bitcoin

Saudi Arabia's recent entry into the mBridge project suggests that China, the project's lead architect, is indeed presenting an interesting solution.

This is especially noteworthy considering that during Chinese President Xi Jinping's visit to Riyadh in November 2022, he called on Gulf countries to accept the Chinese yuan in payment for their oil.

Essentially, mBridge is a blockchain that enables instant cross-border payments and currency exchange operations. The specifications aimed to create a system that is resistant to censorship.

It's crucial to recall that the G7 froze nearly 300 billion euros and dollars belonging to Russia, a decision that has not gone unnoticed by China and Saudi Arabia, who fear being next on the list.

According to the latest reports, mBridge operates with a consensus mechanism known as "HotStuff." This is the same mechanism that was considered by Facebook (Libra) and is used by Ethereum for its staking protocol. It serves as an alternative to Bitcoin's Proof-of-Work mechanism.

The BIS now finds itself in a precarious position, torn between its desire to promote CBDCs and the complex geopolitical realities at play. A potential pause on the mBridge project seems all the more likely given Donald Trump's staunch opposition to CBDCs.

"A CBDC would give the federal government absolute control over your money. It's a dangerous threat to freedom and I will stop it from happening in America," he stated earlier this year.

And for the Anglophones, here is what the head of the BIS stated in 2020 about CBDCs:

What about Bitcoin?

While Donald Trump may succeed in putting an end to the war in Ukraine, it is also likely that a trade war with tariffs will follow.

The tensions, though perhaps less severe, will therefore persist. The Republican candidate has already threatened to implement 100% tariffs against countries that refuse to hold their reserves in U.S. debt.

In other words, if the BRICS continue their strategy, their trade with the United States will decline. Washington will have no choice but to reduce its trade deficit to protect the value of the greenback.

This would mark the end of "the end of the Bretton Woods system," which allowed the United States to print money to benefit from a chronically trade-deficit balance.

Renouncing this exorbitant privilege would, in a way, represent the resurgence of the spirit of Bretton Woods. In clear terms, trade balances would again be settled in a true store of value. However, it is hard to see how gold could make a comeback in a world where Bitcoin is king.

Donald Trump seems to understand that Bitcoin is the best store of value in the world. His promise to create a strategic reserve of Bitcoins could be a winning gamble.

Bitcoin currently accounts for less than 10% of gold's market capitalization. Accumulating one million BTC before the rest of the world will help soften the blow of the relentless decline of America's outrageous monetary hegemony.

The transformation of the dollar into a political weapon has dug its grave. The world will sooner or later obtain its absolute and stateless store of value. Bitcoin appears more than ever as a more realistic solution than the CBDCs.

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Bitcoin, geopolitical, economic and energy journalist.

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