Saudi Arabia has officially withdrawn from mBridge, the multi-central bank digital currency (mCBDC) project spearheaded by the Bank for International Settlements (BIS) Innovation Hub and several central banks, including China’s. The decision, first reported by the Financial Times, sees the Kingdom’s central bank, the Saudi Central Bank (SAMA), concluding its involvement after successfully completing a proof-of-concept (PoC) phase on May 13, 2025. SAMA confirmed its planned departure, indicating that its participation was always intended to be exploratory and time-bound. This development signals a strategic yet cautious approach by Saudi Arabia in navigating the evolving landscape of digital currencies and cross-border payment innovations.

A Chronology of Engagement and Departure

The mBridge project, formally known as the Multiple Central Bank Digital Currency Bridge, was initially established in 2021. It emerged from a collaboration between the BIS Innovation Hub Centre in Hong Kong SAR and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. Its foundational goal was to leverage distributed ledger technology (DLT) to facilitate faster, cheaper, and more efficient cross-border payments and foreign exchange transactions between participating central banks.

Saudi Arabia’s engagement with mBridge intensified over time, culminating in its formal status as a full participant, which was announced around June 2024. This formal inclusion was a significant step, as it brought a major G20 economy and a pivotal player in the global energy market into the fold of a project often viewed through geopolitical lenses. SAMA’s involvement was primarily focused on exploring the practical applications and technical viability of the platform.

The culmination of SAMA’s active participation was the completion of its designated proof-of-concept phase on May 13, 2025. Following this, as per its stated intention, the Saudi Central Bank ended its formal involvement. This sequence of events—joining as a full participant, actively engaging in a PoC, and then withdrawing—underscores a methodological approach to assessing new financial technologies, rather than a sudden or unexpected exit.

Coinciding with these developments, the BIS, which had incubated mBridge since its inception, officially handed over the project’s stewardship to the participating central banks in October 2024. This transition occurred after mBridge reached its minimum viable product (MVP) stage, signifying a level of maturity that allowed for independent central bank governance. Agustin Carstens, then General Manager of the BIS, publicly clarified that the BIS’s departure from direct oversight was a natural progression for the project and not politically motivated, aiming to reassure stakeholders about the project’s technical focus.

Understanding Project mBridge: Objectives and Technology

Project mBridge was conceived to address longstanding inefficiencies inherent in the traditional correspondent banking system, which underpins most international payments. These inefficiencies include high transaction costs, lengthy settlement times, limited operating hours, and significant settlement risk. By utilizing central bank digital currencies (CBDCs) on a shared DLT platform, mBridge aims to bypass multiple intermediaries, reduce latency, and lower costs.

Unlike some digital currency initiatives that propose a single stablecoin for cross-border transactions, mBridge’s innovative approach allows each participating central bank to issue and transact in its own digital currency on a common ledger. This multi-CBDC (mCBDC) architecture promotes interoperability while respecting the monetary sovereignty of each nation. The shared ledger technology provides a transparent and immutable record of transactions, enhancing security and auditability. The platform supports a range of functions, including direct cross-border payments, foreign exchange transactions, and even more complex financial operations, all settled in real-time or near real-time.

The core technology behind mBridge is built on a custom DLT platform, designed to handle the high throughput and security requirements of central bank operations. Its architecture emphasizes resilience, scalability, and the ability to integrate with existing financial infrastructures. The project’s progression from a conceptual phase to an MVP involved rigorous testing of various use cases, legal frameworks, and governance models, all aimed at building a robust and functional platform for wholesale cross-border payments.

Saudi Arabia’s Strategic Rationale for Engagement

Saudi Arabia’s decision to engage with mBridge was multifaceted, aligning with its broader national economic transformation agenda, Vision 2030. Under Vision 2030, the Kingdom is aggressively pursuing economic diversification, reducing its reliance on oil, and fostering innovation in various sectors, including finance and technology. Participation in cutting-edge projects like mBridge provided SAMA with invaluable insights into the potential of DLT and CBDCs to modernize its financial infrastructure and payment systems.

For Saudi Arabia, exploring mCBDC platforms offered several potential benefits:

1. Payment Efficiency: Improving the speed and cost-effectiveness of international transactions, particularly for its burgeoning trade and investment flows.
2. Technological Advancement: Gaining first-hand experience with DLT, quantum-resistant cryptography, and other emerging technologies crucial for future financial innovation.
3. Regional Leadership: Solidifying its position as a leader in financial technology within the Middle East and North Africa (MENA) region.
4. Risk Mitigation: Understanding the operational, cybersecurity, and regulatory risks associated with CBDCs in a controlled, experimental environment.
5. Diversification of Payment Channels: Potentially reducing reliance on existing, often costly, correspondent banking networks and exploring alternatives.

SAMA’s engagement was, therefore, an integral part of its strategy to remain at the forefront of financial innovation, allowing it to evaluate the practical implications of such technologies before committing to long-term implementation. The completion of the PoC phase and subsequent withdrawal suggests that SAMA achieved its immediate learning objectives from the project.

The Geopolitical Undercurrents and US Scrutiny

While mBridge is technically oriented, its development has not been immune to the broader geopolitical dynamics, particularly the ongoing technological and economic competition between the United States and China. The project has drawn significant scrutiny from US policymakers, who view it with a degree of apprehension.

A prominent example of this concern came in a 2024 report from the US-China Economic and Security Review Commission (USCC). The report explicitly stated that mBridge could potentially provide an alternative cross-border settlement system for countries seeking to circumvent US sanctions. This perspective underscores a deeper concern within Washington regarding the potential erosion of the dollar’s dominance in international finance and the broader implications for US foreign policy leverage, particularly its ability to impose and enforce financial sanctions.

The USCC report suggests that a successful mBridge platform, particularly one involving major economies and potentially expanding its reach, could empower nations to conduct international trade and financial transactions outside the traditional, dollar-centric SWIFT system. This could diminish the effectiveness of financial tools used by the US to exert pressure on adversaries or non-compliant states. From this viewpoint, mBridge is not merely a payment innovation but a strategic tool that could alter the global financial architecture.

Despite these geopolitical interpretations, the BIS has consistently maintained that mBridge is a technical project focused solely on improving payment efficiency. Agustin Carstens’ statement regarding the non-political motivation behind the BIS’s handover of the project was a direct attempt to counter these narratives and keep the focus on the technical merits and economic benefits. However, the involvement of the People’s Bank of China (PBOC) and the project’s "China-backed" perception continue to fuel such geopolitical analyses, especially given China’s broader ambitions for the internationalization of the digital yuan (e-CNY) and its push for a multi-polar global financial system.

China’s Broader Digital Currency Agenda

China’s involvement in mBridge is part of its extensive and pioneering efforts in central bank digital currencies. Domestically, the People’s Bank of China (PBOC) has been a global leader in developing and piloting its own sovereign CBDC, the digital yuan (e-CNY). While the e-CNY is primarily designed for domestic retail payments, China has also shown keen interest in exploring how digital currencies, including stablecoins and mCBDCs, could facilitate cross-border transactions.

This interest was highlighted in June when Wang Xin, Director General of the People’s Bank of China Research Bureau, called for closer international monitoring and coordination regarding stablecoins and CBDCs in cross-border payments. His remarks underscore China’s recognition of the growing global significance of digital currencies and the need for robust regulatory frameworks and international cooperation to manage their implications for financial stability and monetary policy.

Furthermore, Chinese authorities have proactively implemented restrictions on the unauthorized issuance of renminbi-pegged stablecoins and tokenized real-world assets, particularly by foreign entities. This move is indicative of Beijing’s desire to maintain tight control over its currency and financial system, even as it explores digital innovations. The PBOC aims to prevent the proliferation of private digital currencies that could undermine its monetary sovereignty or bypass its capital controls, while simultaneously leveraging officially sanctioned platforms like mBridge for strategic international engagement.

Implications of Saudi Arabia’s Withdrawal

Saudi Arabia’s decision to withdraw from mBridge, while framed as a planned conclusion to a PoC, carries several important implications for the project, the Kingdom’s digital currency strategy, and the broader global landscape of digital finance.

1. Impact on mBridge’s Credibility and Expansion: While SAMA’s departure was expected after its PoC, the exit of a significant economy like Saudi Arabia could be perceived as a minor setback for mBridge’s ambitions for broader international adoption. It might prompt other potential participants to scrutinize the project more closely. However, it is equally possible that SAMA’s successful completion of the PoC lends credibility to the project’s technical capabilities, even if the Kingdom chooses not to proceed to a live implementation phase.
2. Saudi Arabia’s Independent Path: The withdrawal might signal that Saudi Arabia intends to pursue its own independent digital currency initiatives or prefer alternative bilateral or multilateral frameworks that align more closely with its specific strategic objectives. The Kingdom has been actively exploring various fintech innovations, and its experience with mBridge will undoubtedly inform its future decisions regarding a potential sovereign CBDC or other digital payment solutions.
3. Regional Dynamics: Saudi Arabia’s decision could influence other Gulf Cooperation Council (GCC) nations. The UAE remains a core participant in mBridge. SAMA’s exit could either encourage other regional players to proceed with caution or inspire them to explore similar exploratory engagements without long-term commitments.
4. Geopolitical Interpretation: Despite SAMA’s and BIS’s technical explanations, the withdrawal could be interpreted by some US policymakers as a positive development, potentially reducing the perceived threat of mBridge as an alternative to the dollar-centric system. It might be seen as a sign that even major economies are exercising caution when engaging with China-backed initiatives that carry geopolitical weight.
5. Focus on Specific Use Cases: SAMA’s experience may lead it to focus on more specific, targeted use cases for DLT in payments, perhaps within its own domestic financial system or with select partners, rather than a broad multilateral platform like mBridge.

The Road Ahead for mBridge and Global CBDCs

Despite Saudi Arabia’s withdrawal, the mBridge project is expected to continue its development with its core participants. Having reached the MVP stage and with the BIS handover complete, the participating central banks will now be responsible for steering its future, potentially moving towards a commercial pilot phase or a live operational environment. The project’s success will depend on its ability to attract more participants, demonstrate tangible economic benefits, and navigate the complex regulatory and interoperability challenges inherent in a global mCBDC system.

Globally, the push for CBDCs and innovative cross-border payment solutions continues unabated. Central banks worldwide are exploring various models, from retail CBDCs to wholesale mCBDCs, to enhance financial stability, promote inclusion, and improve payment efficiency. Projects like mBridge, the European Central Bank’s digital euro initiative, and various bilateral CBDC experiments highlight a global trend towards modernizing financial infrastructure.

The future of cross-border digital payments will likely involve a mosaic of solutions, including enhanced traditional systems, bilateral CBDC bridges, and multilateral platforms like mBridge. Saudi Arabia’s calculated engagement and subsequent withdrawal underscore the careful deliberation that central banks are exercising in adopting these transformative technologies, balancing innovation with strategic national interests and geopolitical considerations. The Kingdom’s journey with mBridge represents a valuable learning experience that will undoubtedly shape its trajectory in the rapidly evolving digital finance landscape.