Chandra Wibowo
Saudi Arabia’s central bank, the Saudi Central Bank (SAMA), has officially withdrawn from mBridge, a significant cross-border digital currency project championed by China and designed to facilitate direct transactions between central banks. The withdrawal, confirmed by the Financial Times, follows SAMA’s participation as a full member in the initiative, which concluded after a proof-of-concept phase on May 13, 2025. This development occurs against a backdrop of increasing geopolitical attention on digital currency initiatives and their potential implications for global financial architecture.
Project mBridge: Genesis and Objectives
Established in 2021, mBridge emerged as a collaborative effort spearheaded by the Bank for International Settlements (BIS) Innovation Hub in partnership with the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. The primary objective of mBridge was to fundamentally reshape the landscape of cross-border payments, aiming to render them more efficient, faster, and significantly cheaper than existing correspondent banking systems.
Unlike many digital currency projects that rely on a singular stablecoin, mBridge adopted a more decentralized approach. The platform allows participating central banks to issue and transact using their own respective digital currencies on a shared distributed ledger. This architecture is designed to support a range of financial operations, including direct cross-border payments and foreign exchange transactions, without necessitating the conversion of funds into a common intermediary currency. This innovation was intended to streamline settlement processes and reduce friction in international trade and finance.
Timeline of Saudi Arabia’s Involvement and Departure
Saudi Arabia’s engagement with mBridge began when the Saudi Central Bank joined as a full participant in June 2024. This marked a significant step in the Kingdom’s exploration of central bank digital currencies (CBDCs) and their potential role in international finance. The participation culminated in the completion of a proof-of-concept phase on May 13, 2025.
According to a statement cited by the Financial Times, SAMA indicated that its decision to end participation was part of its planned exit strategy after the completion of the project’s initial testing and validation phase. The central bank stated, "SAMA had planned to end its participation." This suggests that the withdrawal was a pre-determined outcome of its involvement in the proof-of-concept, rather than a reaction to any specific event or policy shift within the mBridge initiative itself.
The mBridge project itself underwent a transition in its operational oversight. Until October 2024, the BIS Innovation Hub continued to guide its development. At that point, following the achievement of its minimum viable product (MVP) stage, the BIS formally handed over the project’s reins to the participating central banks. At the time of this handover, then-BIS General Manager Agustín Carstens emphasized that the BIS’s departure from direct management was not politically motivated, positioning it as a natural progression as the project matured.
Broader Geopolitical Context and US Scrutiny
The mBridge project, despite its stated aims of improving payment efficiency, has not been immune to broader geopolitical considerations, particularly from the United States. A comprehensive report published in 2024 by the U.S.-China Economic and Security Review Commission highlighted mBridge as a potential tool that could enable countries to circumvent U.S. sanctions. The report posited that mBridge could evolve into an alternative cross-border settlement system for nations seeking to avoid the reach of U.S. financial sanctions, a prospect that has drawn significant attention from American policymakers.
This concern stems from the potential for a widely adopted digital currency system not directly controlled by Western financial institutions to reduce the effectiveness of economic sanctions, which have become a cornerstone of U.S. foreign policy. The ability for countries to transact directly in their own digital currencies could offer a pathway to bypass traditional financial channels that are susceptible to U.S. oversight and control.
China’s Evolving Stance on Digital Currencies in Cross-Border Payments
Concurrently with these developments, China’s central bank, the People’s Bank of China (PBOC), has been increasingly vocal about the potential role of stablecoins and CBDCs in shaping the future of cross-border payments. In June of the current year, Wang Xin, Director-General of the PBOC Research Bureau, publicly advocated for enhanced international coordination and closer monitoring of stablecoins and CBDCs in the context of cross-border transactions.
These remarks followed a period where Chinese authorities implemented stricter regulations on the issuance of renminbi-pegged stablecoins and tokenized real-world assets, even by foreign entities. This indicates a dual approach by China: actively exploring and promoting the use of digital currencies for international transactions while also seeking to maintain robust control and oversight over the ecosystem to mitigate potential risks.
Implications of Saudi Arabia’s Withdrawal
Saudi Arabia’s withdrawal from mBridge, while framed by SAMA as a planned exit, carries potential implications. As a major player in the global energy markets and a significant economic force in the Middle East, the Kingdom’s participation in mBridge lent considerable weight to the project. Its departure could be interpreted in several ways:
- Focus on Domestic CBDC Development: Saudi Arabia may be prioritizing its own domestic digital currency initiatives or bilateral arrangements that align more closely with its immediate strategic interests. The Kingdom has been actively researching and developing its financial infrastructure, and withdrawal from a multi-lateral project might free up resources and focus for internal priorities.
- Geopolitical Alignments: The Kingdom’s decision could also reflect its ongoing efforts to balance its relationships with global powers. While maintaining strong ties with the West, Saudi Arabia has also been deepening its engagement with other economic blocs, including those led by China. Its participation in mBridge could have been a diplomatic gesture, and its withdrawal might signal a recalibration of these strategic partnerships.
- Risk Assessment: The geopolitical scrutiny from the U.S. and concerns about sanctions evasion might have prompted SAMA to reassess the risks associated with deep involvement in a China-led digital currency initiative, especially given Saudi Arabia’s significant role in dollar-denominated oil trade.
- Technological Maturity and Interoperability: The withdrawal could also be a pragmatic decision based on the perceived technological maturity and interoperability of the mBridge platform at this stage. As a proof of concept, its scalability and real-world applicability for a major economy like Saudi Arabia might still be under evaluation.
The Future of Cross-Border Digital Currencies
The mBridge project continues its development under the stewardship of its founding central banks. The successful handover from the BIS signifies a transition towards a more decentralized governance model for this innovative payment system. The project’s future success will hinge on its ability to attract broader participation, address regulatory concerns, and demonstrate its capacity to deliver on its promise of faster and cheaper cross-border payments.
The involvement of economies like Saudi Arabia, even if temporary, highlights the global interest in exploring alternative payment rails. However, the geopolitical dimension, particularly the U.S. perspective on sanctions and financial dominance, remains a critical factor shaping the trajectory of these initiatives. As nations continue to experiment with CBDCs and explore new avenues for international transactions, the interplay between technological innovation, economic pragmatism, and geopolitical strategy will undoubtedly define the evolving landscape of global finance.
Cointelegraph reached out to the Saudi Central Bank for further comment on this development but had not received a response by the time of publication. The ongoing evolution of digital currencies in cross-border transactions remains a dynamic and closely watched area, with significant implications for global trade, financial stability, and international relations.
