Saudi Arabia Withdraws from China-Backed mBridge Digital Currency Project

Saudi Arabia has officially withdrawn from mBridge, a significant international project focused on developing a multi-central bank digital currency (mCBDC) platform for cross-border payments. The Saudi Central Bank (SAMA) confirmed its departure from the initiative, which is backed by China and facilitated by the Bank for International Settlements (BIS) Innovation Hub. This move comes after SAMA successfully completed its participation in a proof-of-concept phase of the project, which concluded on May 13, 2025. SAMA had joined mBridge as a full participant in June 2024, indicating a planned exit strategy following the completion of its testing phase.

The mBridge project, established in 2021, represents a collaborative effort between the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. Its core objective is to revolutionize cross-border payments by making them faster, cheaper, and more efficient. Unlike projects that might rely on a single, overarching stablecoin, mBridge is designed to allow participating central banks to issue and transact using their own digital currencies on a shared ledger. This architecture enables direct transactions between central banks, facilitating not only cross-border payments but also foreign exchange transactions without the need for traditional correspondent banking intermediaries.

The development of mBridge progressed under the guidance of the BIS until October 2024. At this juncture, the BIS officially handed over the project’s operational reins to the participating central banks, marking the transition from its minimum viable product (MVP) stage. Agustín Carstens, the then-General Manager of the BIS, emphasized that the BIS’s departure from direct operational management was not politically motivated, underscoring the project’s technical advancement and readiness for central bank stewardship.

Despite the project’s stated goals of enhancing payment efficiency and international financial cooperation, mBridge has attracted considerable attention and scrutiny from policymakers in the United States. A 2024 report by the U.S.-China Economic and Security Review Commission (USCC) raised concerns that mBridge could potentially evolve into an alternative cross-border settlement system. Such a system, the report suggested, could be utilized by countries seeking to circumvent U.S. sanctions, thereby posing potential geopolitical and economic risks. This U.S. perspective highlights the broader geopolitical implications of digital currency initiatives and the potential for them to alter the existing international financial architecture.

Cointelegraph reached out to the Saudi Central Bank for further comment on its withdrawal but had not received a response by the time of publication. This lack of immediate official elaboration leaves room for further analysis regarding the specific motivations behind Saudi Arabia’s decision.

Meanwhile, China’s central bank, the People’s Bank of China (PBOC), continues to actively explore and promote the role of digital currencies, particularly stablecoins, in facilitating cross-border payments. The global expansion of stablecoin usage has prompted China to advocate for closer monitoring and international coordination in this domain. In June, Wang Xin, Director General of the PBOC’s Research Bureau, publicly called for enhanced oversight of stablecoins and central bank digital currencies (CBDCs) within the context of cross-border transactions. His remarks underscored China’s strategic interest in shaping the future of international digital finance.

These statements from Chinese officials come after a period of regulatory adjustments within China itself. Months prior, Chinese authorities had implemented restrictions on the unauthorized issuance of renminbi-pegged stablecoins and tokenized real-world assets, including those issued by foreign entities. This domestic regulatory stance suggests a desire to maintain control and stability within its own financial system while simultaneously engaging with and influencing international digital currency developments.

The mBridge project, at its core, aims to leverage the technological advancements of distributed ledger technology and digital currencies to address the inherent inefficiencies of the current correspondent banking system. This system, while robust, often involves multiple intermediaries, leading to delays, higher fees, and reduced transparency in cross-border transactions. By enabling direct peer-to-peer transactions between central banks using their own digital currencies, mBridge seeks to bypass these intermediaries, thereby streamlining the process and potentially reducing costs significantly. The platform’s design, allowing for the use of multiple CBDCs on a shared infrastructure, reflects a flexible approach to mCBDC interoperability, acknowledging the diverse digital currency strategies of participating nations.

The handover of mBridge from the BIS to the participating central banks marked a critical phase in its evolution, signifying a transition from an experimental project to a potentially operational platform under the direct control of its core members. The BIS, as a global financial institution representing central banks, has played a crucial role in fostering innovation and providing a neutral platform for such experimental initiatives. Its involvement lent significant credibility to mBridge, showcasing a commitment from established financial authorities to explore the potential of digital currencies.

The U.S. concerns, as articulated by the USCC, highlight a broader debate surrounding the implications of digital currency initiatives for global financial stability and U.S. foreign policy objectives. The ability of countries to bypass U.S. dollar dominance and sanctions regimes through alternative payment systems is a significant consideration for U.S. policymakers. Therefore, Saudi Arabia’s withdrawal from mBridge, while potentially driven by internal strategic considerations or a completion of its testing objectives, occurs within a geopolitical context where such projects are viewed with heightened scrutiny.

The continued focus of the People’s Bank of China on stablecoins and CBDCs in cross-border payments suggests that China remains committed to advancing its agenda in the global digital currency landscape. Its call for international coordination, while seemingly promoting cooperation, also reflects its interest in influencing the standards and governance frameworks that will emerge. The interplay between national interests, technological innovation, and geopolitical considerations will continue to shape the development and adoption of cross-border digital currency solutions.

Saudi Arabia’s participation in mBridge, though now concluded, represented an engagement with a pioneering initiative that sought to redefine cross-border financial flows. The reasons for its withdrawal, whether strategic, programmatic, or otherwise, will likely become clearer over time as the country articulates its future digital currency and payment strategy. The project itself continues to evolve under the stewardship of its remaining central bank participants, with its future trajectory dependent on their collective commitment and the evolving global landscape of digital finance. The involvement of a major oil-exporting nation like Saudi Arabia in such a project underscored the potential for digital currencies to impact global trade and finance, making its departure a noteworthy development in the ongoing narrative of digital currency adoption and international financial reform.