anjir abdul
Saudi Arabia has officially withdrawn from mBridge, the ambitious China-backed cross-border digital currency project, a move confirmed by the Financial Times. This decision, following a comprehensive proof of concept phase, signals a significant development in the evolving landscape of global digital finance and the strategic positioning of nations in the nascent CBDC ecosystem. The project, designed to facilitate direct, faster, and cheaper transactions between central banks using their own digital currencies on a shared ledger, has been under intense international scrutiny, particularly from US policymakers concerned about its potential geopolitical implications.
The Saudi Central Bank (SAMA) initially joined mBridge as a full participant in June 2024, embarking on an exploratory journey into the capabilities of a multi-CBDC platform. Their involvement was seen by many as a strategic step for the Kingdom, aligning with its ambitious Vision 2030 goals for economic diversification and digital transformation. However, SAMA concluded its participation after completing a proof of concept on May 13, 2025. The Financial Times, citing a statement from SAMA, reported that the central bank’s exit was a pre-planned conclusion to its evaluation phase, indicating that their engagement was always intended as a finite assessment of the project’s viability and suitability for Saudi Arabia’s specific needs and strategic objectives. This planned departure suggests that SAMA may have gathered sufficient insights or identified alternative pathways for its digital currency aspirations, rather than a sudden change of heart.
mBridge itself was established in 2021 as a collaborative initiative spearheaded by the Bank for International Settlements (BIS) Innovation Hub. Its founding central bank partners included the People’s Bank of China (PBOC), the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the United Arab Emirates. The overarching goal of the project was to revolutionize cross-border payments, which are notoriously slow, expensive, and opaque under the traditional correspondent banking system, often reliant on the SWIFT network and numerous intermediaries. By leveraging a distributed ledger technology (DLT) platform, mBridge aimed to bypass these inefficiencies, allowing participating central banks to issue and transact directly in their respective digital currencies, thus streamlining international trade and financial flows.
A key innovation of mBridge lies in its architecture: it does not rely on a single stablecoin but rather enables each participating central bank to maintain sovereignty over its own digital currency while facilitating interoperability on a common platform. This approach allows for instantaneous cross-border payments and foreign exchange transactions, reducing settlement risks and costs. For nations like Saudi Arabia, a major global oil exporter and importer of goods and services, the promise of more efficient international payments holds considerable economic appeal. Exploring such platforms could offer greater control over financial infrastructure and potentially reduce reliance on established Western-dominated systems.
The mBridge project continued its development under the stewardship of the BIS until October 2024, when it reached its minimum viable product (MVP) stage. At this juncture, the BIS transitioned control of the project to the participating central banks, marking a critical step towards operationalization. Agustí n Carstens, then-BIS General Manager, explicitly stated that the BIS’s departure from direct oversight was not politically motivated, emphasizing the technical and developmental milestones achieved. However, despite these assurances, the project has consistently attracted significant geopolitical scrutiny, particularly from the United States.
US policymakers have voiced concerns that mBridge, along with other similar multi-CBDC initiatives, could potentially offer an alternative cross-border settlement system for countries seeking to circumvent US sanctions. A 2024 report from the US-China Economic and Security Review Commission highlighted these worries, suggesting that such platforms could erode the effectiveness of the US dollar’s dominance in international finance and undermine Washington’s ability to exert financial leverage. The dollar’s status as the world’s primary reserve currency and the preferred medium for international trade grants the US considerable geopolitical power, a position that emerging digital payment rails could challenge. Saudi Arabia’s initial involvement, given its strategic relationship with both the US and China, added another layer of complexity to these geopolitical considerations. Its withdrawal, therefore, might be interpreted in various ways – from a successful technical evaluation leading to different strategic choices, to a move influenced by external geopolitical pressures or internal assessments of optimal alignment.
China, a driving force behind mBridge, has been at the forefront of central bank digital currency development with its e-CNY (digital yuan). The People’s Bank of China (PBOC) has consistently emphasized the role digital currencies, including stablecoins, could play in modernizing cross-border payments. PBOC Research Bureau director General Wang Xin, in June, called for closer international monitoring and coordination regarding stablecoins and CBDCs in cross-border transactions, reflecting China’s proactive stance in shaping the future of digital finance. This push aligns with Beijing’s broader strategic goal of increasing the international usability of the renminbi and reducing its vulnerability to external financial pressures, including those stemming from the US dollar system. Chinese authorities have also taken steps to regulate the unauthorized issuance of renminbi-pegged stablecoins and tokenized real-world assets, underscoring their desire for controlled innovation within their digital currency ecosystem.
For Saudi Arabia, its engagement with mBridge was likely part of a broader exploration into digital financial innovation. The Kingdom has been actively pursuing various initiatives to digitize its economy and financial sector, as outlined in Vision 2030. This includes exploring its own potential national CBDC, enhancing digital payment infrastructure, and fostering a vibrant fintech ecosystem. SAMA’s planned exit from mBridge, rather than indicating a retreat from digital innovation, could signify a pivot towards other multi-CBDC projects, bilateral agreements, or the development of a proprietary national digital currency infrastructure that better suits its unique economic and political landscape. It is also possible that the proof of concept revealed certain technical or governance challenges within mBridge that did not align with SAMA’s long-term strategic vision.
The decision also highlights the nuanced balancing act many nations, particularly those with significant economic ties to both the East and West, must perform in the evolving global financial architecture. While the allure of more efficient and potentially de-dollarized payment systems is strong, the political ramifications and the need to maintain stable relationships with major economic partners cannot be overlooked. Saudi Arabia’s withdrawal from mBridge, while framed as a technical conclusion, inevitably carries weight in the ongoing global dialogue about financial sovereignty, technological leadership, and geopolitical alignment.
As the world continues to grapple with the opportunities and challenges presented by digital currencies, the mBridge project will continue to evolve, likely with its core members. Its progress will remain a key indicator of the potential for non-Western-led digital financial infrastructure. Meanwhile, Saudi Arabia’s next steps in the CBDC space will be closely watched, as the Kingdom charts its course in a rapidly digitizing global economy, aiming to bolster its economic resilience and international standing. The episode underscores that while the promise of faster and cheaper payments is universal, the path to achieving it through central bank digital currencies is paved with complex technical, economic, and geopolitical considerations.
