China is finalizing preparations for the commercial launch of a digital currency program that could radically transform the structure of international transactions, according to the Financial Times. The Beijing-led mBridge platform brings together the central banks of mainland China, Hong Kong, Thailand, the UAE, and Saudi Arabia. According to sources familiar with the situation, a special legal entity will be established in Hong Kong to manage the system’s operations.
The exact launch date has not been disclosed, but preparations are in the final stages. Fees on mBridge are expected to be half those of traditional international payment systems. The project’s primary target audience will be small businesses, for whom using SWIFT is often too expensive and complicated.
The Digital Silk Road
China’s drive to expand the use of its currency has only intensified against the backdrop of the war in Iran. Since the start of the conflict, the popularity of CIPS (the Chinese equivalent of SWIFT for yuan settlements) has surged. The mBridge platform will be a separate but complementary system designed to promote the use of the digital yuan (e-CNY).
The project is being launched during a period of active development of regional payment systems. Similar goals of speeding up and reducing the cost of transactions are being pursued by the European SEPA and private initiatives, such as Ant Group’s QR code network.
“A quiet arms race among alternative financial systems is taking place behind the scenes,” notes Tom Keating, director of the Center for Finance and Security at the British think tank RUSI. He points out that while the U.S. under Donald Trump is betting on stablecoins (crypto assets pegged to fiat), China is seeking to cement the role of the digital yuan through systems such as mBridge. “It’s a kind of ‘One Belt, One Road’ in the world of digital currencies,” he added.
According to Jin Ma, head of China research at the Institute of International Finance, the global payments landscape, which was previously dominated by the SWIFT system, is fragmenting into competing networks. The mBridge project, originally launched in 2021 under the auspices of the Bank for International Settlements (BIS), has repeatedly faced criticism from politicians who feared the system would allow circumvention of dollar sanctions.
In 2024, under pressure from Washington, the BIS transferred management of the project to the participating countries. Nevertheless, the leadership of the BIS and the People’s Bank of China emphasize that mBridge fully complies with FATF anti-money laundering rules.
Technological Advantages and Scope
The platform uses blockchain technology for direct settlements between central banks in their own digital currencies. This eliminates the need to use the dollar as an intermediary and reduces the time required for currency transactions to a few seconds.
Commercial banks will also be able to participate in transactions under the supervision of their regulators. According to available data, transactions totaling approximately 470 billion yuan ($69 billion) have already been processed through mBridge.
“For exporters, this speeds up cash turnover and reduces the risk of liquidity shortages,” explains Wang Jian, chief financial sector analyst at Guosen Securities.
Strategically, the system has the potential to strengthen China’s position in global trade. More broadly, the success of mBridge will bolster China’s influence in the global monetary order and support the long-term internationalization of the yuan.
