China-led CBDC platform mBridge tops $55bn in cumulative cross-border payments

Uk Jin

Summary

China-led cross-border CBDC payments project mBridge has seen cumulative settlements rise to about $55.5bn, up roughly 2,500-fold from 2022.
About 95% of mBridge settlement volume is estimated to be in China’s digital yuan (e-CNY), while cumulative digital-yuan transaction value stands at about 16.7 trillion yuan, up more than 800% from 2023.
Lu Lei, deputy governor of the People’s Bank of China, said the digital yuan will be shifted into a digital deposit currency to serve as a store of value and for cross-border payments, and that a system allowing commercial banks to pay interest will be introduced—an approach viewed as building a parallel network to reduce reliance on the dollar-centric payments system.

Cumulative payments processed by the China-led central bank digital currency (CBDC)-based cross-border settlement project “mBridge” have surpassed $55bn, data show.

On the 18th (Korea time), digital-asset outlet Cointelegraph, citing data from the Atlantic Council, reported that mBridge has so far processed more than 4,000 cross-border transactions, with cumulative settlement value reaching about $55.5bn. That is roughly a 2,500-fold increase from 2022.

mBridge is a cross-border CBDC payments platform involving the People’s Bank of China, alongside the central banks of Hong Kong, Thailand, the United Arab Emirates (UAE) and Saudi Arabia. About 95% of the settlement volume is estimated to be accounted for by China’s digital yuan (e-CNY).

The growth reflects steps by the Chinese government to strengthen the digital-yuan infrastructure. According to the People’s Bank of China, transactions using the digital yuan have so far processed more than 3.4bn transactions, with cumulative transaction value tallied at about 16.7 trillion yuan. That is an increase of more than 800% from 2023.

Specifically, China is focusing on expanding use cases for the digital yuan. Lu Lei, deputy governor of the People’s Bank of China, said, “The digital yuan will move beyond a cash-like payment instrument to become a ‘digital deposit currency,’ taking on functions including store of value and cross-border payments,” adding, “We will introduce a new system that allows commercial banks to pay interest on the digital yuan.”

The development is being interpreted as China stepping up yuan internationalisation efforts. Alysha Changani, a researcher at the Atlantic Council, said: “Rather than directly challenging dollar hegemony, China and its partner countries are building a parallel payments network that reduces reliance on the dollar-centric settlement system.”