China is preparing for a commercial rollout of Mbridge, a blockchain-based system enabling cross-border settlements of central bank digital currencies (CBDCs), according to FT. The platform has processed 470 billion yuan (nearly $69 billion) in cross-border settlement volume since its development began in 2021. China aims to challenge traditional systems like SWIFT by offering fees at half the rate, with plans to establish a Hong Kong-based entity to manage the commercial launch. The initiative reflects intensifying competition in digital currency infrastructure as nations seek alternatives to Western-dominated payment networks.
Mbridge Development Timeline and Participant Nations
Mbridge has been in development since 2021 with participation from China, Hong Kong, Thailand, the United Arab Emirates, Saudi Arabia, and the Bank for International Settlements (BIS). The BIS abandoned the project in 2024, with former BIS General Manager Agustín Carstens stating that project participants would carry it out independently. After reaching minimum viable product stages, the system completed its first Digital Dirham cross-border settlement in 2024, when Sheikh Mansour Bin Zayed Al Nahyan, Chairman of the Board of the Central Bank of the UAE, sent 50 million digital dirhams ($13.6 million) to China.
Transaction Volumes and Operational Use Cases
Cross-border settlements using Mbridge have reached volumes of 470 billion yuan, nearly $69 billion. China promotes the system as charging half the fees of traditional systems such as SWIFT. The Chinese yuan has experienced increased use in international markets, with reports linking its adoption to payments tied to the Gulf war using the Cross-Border Interbank Payment System (CIPS), launched in 2015. China plans to set up a Hong Kong-based entity to manage the commercial rollout of Mbridge.
Analyst Commentary on Renminbi Internationalization
Wang Jian, chief financial sector analyst at Guosen Securities, told FT that Mbridge's adoption would speed up cash turnover and reduce the risk of liquidity strains. "More broadly, it could strengthen China's voice in the global monetary order and support the internationalization of the renminbi," he stated.
FAQ
What is Mbridge and who developed it?
Mbridge is a blockchain-based system enabling cross-border settlements of central bank digital currencies (CBDCs). It has been in development since 2021 with participation from China, Hong Kong, Thailand, the United Arab Emirates, Saudi Arabia, and the Bank for International Settlements, though the BIS withdrew from the project in 2024.
How much transaction volume has Mbridge processed?
Mbridge has processed 470 billion yuan (nearly $69 billion) in cross-border settlement volume. In 2024, the system completed its first Digital Dirham cross-border settlement when Sheikh Mansour Bin Zayed Al Nahyan sent 50 million digital dirhams ($13.6 million) to China.
How does Mbridge compare to SWIFT in terms of fees?
China promotes Mbridge as charging half the fees of traditional systems such as SWIFT. The platform is designed to facilitate faster cross-border settlements using blockchain technology and central bank digital currencies.
