Let's talk about mBridge, a bold new frontier in the world of digital finance that could change how countries interact economically.
The mBridge project, short for MultiCBDC Bridge, is a central bank digital currency (CBDC) pilot initiative driven by a partnership between the Bank for International Settlements (BIS) Innovation Hub and the central banks of Hong Kong, Thailand, China, and the United Arab Emirates.
The idea is simple but potentially game-changing: streamline and modernize cross-border payments by using multiple CBDCs, bypassing the slow, expensive, and multi-layered traditional banking systems.
In a world where crossborder payments can take days and rack up heavy fees, mBridge offers a secure, cost-effective alternative that can reduce settlement times, cut costs, and increase transparency.
But let's take a step back—what is a CBDC? Unlike Bitcoin or other decentralized cryptocurrencies, a CBDC is a digital version of a country's currency, issued and backed by its central bank.
It comes in two flavours: retail CBDCs for everyday use by the general public, and wholesale CBDCs meant for large-scale transactions between financial institutions.
Both have the potential to reshape how we think about money—domestically and internationally—by making payments more secure, more efficient, and more direct.
Imagine a world where you can send or receive money across borders as easily as a text message, without the need for intermediaries like commercial banks.
That's the promise of CBDCs, and mBridge could be one of the first real-world applications to deliver on that promise.
Now, will mBridge replace the U.S. dollar?
Not anytime soon.
The U.S. dollar's global dominance is deeply entrenched, built on decades of trust in U.S. financial systems, the liquidity of U.S. markets, and the dollar's role as a safe haven in times of crisis.
The dollar is woven into the fabric of global trade and finance, and it's the primary reserve currency held by central banks around the world.
Changing that isn't just a technological challenge—it's a fundamental shift in the global economic order that could take decades to unfold.
While mBridge could allow countries to settle cross-border transactions in their local digital currencies, potentially reducing the dollar's dominance in certain contexts, it's not a silver bullet.
The dollar will remain the world's go-to currency for the foreseeable future.
That said, mBridge does play into a larger narrative of de-dollarisation, where countries—particularly those like China and Russia—are seeking ways to reduce their reliance on the U.S. dollar in international trade and finance.
Geopolitical tensions, especially sanctions that limit access to the global financial system, have pushed these nations to explore alternatives.
Technological innovations like CBDCs, and by extension mBridge, provide a way for countries to bypass the dollar in cross-border transactions.
Nations might prefer to settle their trades in their own digital currencies or regional alternatives, reducing their exposure to dollar fluctuations and the whims of U.S. economic policies.
But the process of de-dollarisation will be gradual.
Global financial institutions, multinational corporations, and even governments still trust the stability and liquidity that the U.S. dollar offers.
For countries like Malaysia and Thailand, joining BRICS—or aligning with mBridge's broader goals—could offer a counterweight to U.S. economic hegemony.
BRICS, which includes U.S. rivals like China and Russia, gives nations in Southeast Asia the chance to secure trade deals outside the dollar's shadow.
But it's a delicate dance.
Engaging too closely with BRICS could strain relations with Western powers, which remain important trading partners and investors in Southeast Asia.
Malaysia and Thailand will have to be cautious, as joining a bloc that includes sanctioned countries like Russia could complicate their foreign policy and economic strategies.
Can Russia, under U.S. sanctions, still be an important trading partner?
That's a tricky question.
While Russia's economy is certainly constrained by sanctions, it still holds significant sway in energy markets, and some countries are willing to overlook sanctions for access to resources like oil and gas.
However, deepening ties with Russia comes with the risk of secondary sanctions from the U.S., something Malaysia and Thailand would need to weigh carefully.
As Malaysia heads toward its next election, could a change in government alter its stance on BRICS?
Absolutely.
Shifts in political leadership often bring shifts in foreign policy.
A new government might be more cautious about engaging with BRICS, particularly if they're more aligned with Western economic interests or concerned about maintaining strong ties with the U.S. and Europe.
And in the backdrop of the ongoing war in Gaza, Malaysia's perception of Western powers could also shift.
Malaysia has long been critical of Western actions in the Middle East, and current events could deepen those sentiments, potentially nudging the country closer to nations like Russia and China, which are often seen as more sympathetic to the Palestinian cause.
As Malaysia gears up to chair ASEAN in 2025, it has the chance to amplify the voice of the Global South in a way that reflects both regional and global aspirations.
Malaysia sees itself as part of the Global South and has long championed the cause of developing nations, advocating for more equitable global governance.
As the Global South's influence continues to rise over the coming decades—driven by demographic shifts, technological advances, and increased economic power— Malaysia will have to navigate a world where the lines between East and West, North and South, are increasingly blurred.
Its role within Asean and the Global South will require balancing regional leadership with global aspirations, all while adapting to the ever-shifting dynamics of global trade, finance, and geopolitics.
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Economist Samirul Ariff Othman is an adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. He has a background as a senior researcher at the Malaysian Institute of Economic Research.