China Readies Commercial Launch of mBridge Digital-Currency Payments Network

Backed by the central banks of Hong Kong, Thailand, the UAE and Saudi Arabia

Fees targeted at half the cost of existing cross-border payment networks

China is preparing to commercially launch a digital-currency-based cross-border payments network as it seeks to reduce reliance on the dollar. The move comes as international payment systems split into competing networks, and underscores Beijing’s push to internationalize the yuan and deepen financial ties with Belt and Road partner countries.

China is preparing a commercial rollout of the digital-currency payments platform known as mBridge, the Financial Times reported on June 14. The platform is backed by the central banks of mainland China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia. A separate Hong Kong-based entity will oversee operations, according to people familiar with the matter.

No launch date has been disclosed. Preparations are well advanced, and fees are expected to be about half those charged by existing international payment systems. Small and midsize companies that find cross-border payment networks such as SWIFT costly and cumbersome are expected to be among mBridge’s main users.

The mBridge platform uses blockchain technology. It is designed to let central banks transact directly in their own digital currencies, reducing the dollar’s role as an intermediary. It could also cut foreign-exchange settlement times to seconds. Tom Keatinge, founding director of the Centre for Finance and Security at the Royal United Services Institute, said China is trying to secure a role for digital currencies in global finance through systems such as mBridge. He described the platform as “a digital currency Belt and Road,” adding that it was no surprise China would keep pressing ahead.

China’s push to internationalize its currency has gained momentum from the war in Iran. Use of CIPS, China’s existing yuan-based cross-border clearing and settlement system, has surged since the conflict began. CIPS is often described as China’s version of SWIFT. mBridge is separate from CIPS but is designed to complement it and expand use of the digital yuan.

mBridge grew out of an earlier project launched by the Hong Kong Monetary Authority and the Bank of Thailand under the name Inthanon-LionRock. It took its current form in 2021 after the Bank for International Settlements and the central banks of China, the UAE and Thailand joined the effort. The project has repeatedly faced public and political scrutiny over whether it could become a tool for countries or institutions to bypass the dollar system and evade sanctions.

The BIS handed the mBridge project over to participating jurisdictions in 2024. The Financial Times previously reported that the decision was driven by pressure from Washington. Officials at the BIS and the People’s Bank of China say mBridge complies with anti-money-laundering rules set by the Financial Action Task Force, the global body that combats illicit financial flows.

Kim Dong-hyun, Hankyung.com reporter 3code@hankyung.com