mBridge Project
Why in News?
Saudi Arabia confirmed it has withdrawn from Project mBridge after completing its proof‑of‑concept phase, citing this as part of its original plan; reports also note US scrutiny over the platform’s potential to reduce dollar/SWIFT dependence.
About
- The Mission: Launched in 2021, Project mBridge is a blockchain-based platform designed to facilitate instant, cheap, cross-border payments directly between central banks using digital currencies (CBDCs).
- The Core Participants: It was co-developed by the central banks of China, Hong Kong, Thailand, and the UAE. Macau joined later in 2024.
- The Scale: According to data from the Atlantic Council, the platform has actively progressed, facilitating over 4,000 transactions crossing a volume of $55 billion.
Chronology of Saudi Arabia's Involvement
- 2023 (Observer): SAMA initially entered the project as an observing member under the BIS umbrella to assist internal technical research.
- June 2024 (Full Member): Saudi Arabia upgraded to a full participant to test wholesale CBDC efficiencies for commercial settlements.
- May 13, 2025 (Exit): SAMA formally completed its targeted test and concluded active membership.
Why Did Saudi Arabia Exit? (The Official vs. Geopolitical View)
- The Official Rationale: SAMA maintains that the exit was not a sudden policy reversal. It stated that its participation was structurally limited from the outset to a "Proof of Concept" (PoC) trial, which simply reached its planned completion.
- The Geopolitical Reality: Analysts highlight intense pressure on Riyadh. Being caught between its deep security/financial ties with the US and growing trade ties with China, remaining in an explicitly "anti-dollar" network posed an unnecessary diplomatic risk for the Kingdom.
The Impact on Global Finance & China
- A Symbolic Hit to De-Dollarisation: Saudi Arabia's departure slows down the momentum of building a robust alternative to the SWIFT system backed by major oil economies.
- Narrower Regional Scope: Experts note that while the exit "dents the anti-dollar coalition story," mBridge is far from dead. The platform will continue to function, but its operational scope will likely remain narrower and heavily focused on intra-Asian trade corridors.
