Chinese-led Cross-Border Digital Currency Platform Achieves Over $55 Billion in Transactions
mBridge, a China-backed initiative focused on cross-border digital currency transactions, has processed more than $55 billion across over 4,000 transactions since its inception. This marks a significant milestone in efforts to establish borderless payment systems outside traditional dollar-dominated frameworks. The platform's rapid growth highlights the increasing role of central bank digital currencies (CBDCs) in international finance, supported by several countries integrating the technology into their banking infrastructure.
The project, which is a collaborative effort among central banks in mainland China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia, has demonstrated notable progress. China’s digital yuan, or e-CNY, accounts for approximately 95% of the total settlement volume on mBridge. This burgeoning usage is part of China’s broader push to develop its CBDC infrastructure, with recent data from the People’s Bank of China revealing that the e-CNY facilitated over 3.4 billion transactions totaling roughly 16.7 trillion yuan ($2.4 trillion), an increase of over 800% compared to 2023.
Further developments include China's move to allow commercial banks to pay interest on digital yuan wallets. This initiative aims to elevate the e-CNY from a simple digital cash tool to an asset capable of store of value and cross-border payments. Deputy Governor Lu Lei of the People’s Bank of China stated that the digital yuan is transitioning into a “digital deposit currency,” expanding its role within the financial ecosystem.
Analysts view these advancements as part of China's strategy to gradually internationalize the yuan through digital infrastructure, reducing reliance on the US dollar without directly challenging its dominance. Instead, Beijing focuses on establishing parallel settlement channels that complement existing global payment systems.
BIS Withdraws from mBridge Amid Sanctions Concerns
In early 2024, the Bank for International Settlements (BIS) announced its departure from mBridge, the cross-border CBDC platform it helped develop through its Innovation Hub. The BIS characterized the exit as a “graduation,” emphasizing that the organization remains committed to innovative financial initiatives. BIS General Manager AgustÃn Carstens clarified that the platform is not intended to serve as a bypass mechanism for international sanctions, despite ongoing speculation about its geopolitical implications.
Following its withdrawal, the BIS has redirected efforts toward Project Agorá, a new initiative involving several prominent Western central banks, which has recently expanded its testing parameters. This strategic shift signals ongoing evolution in the landscape of central bank digital currencies and international monetary cooperation.
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