China-led mBridge has completed over 4,000 cross-border transactions with a total value of $55.5 billion, a 2,500-fold increase compared to 2022, with 95% settled in digital yuan. Participants include the central banks of China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia.
What is mBridge? 7x24 Digital Financial Bridge
mBridge is essentially a blockchain-based cross-border payment infrastructure. It allows central banks to directly and instantly exchange and settle digital currencies, aiming to create a system that is faster, cheaper, and more transparent than traditional agent bank models. The digital yuan is the dominant currency within this system.
Traditional cross-border payments rely on the SWIFT system and a network of correspondent banks. A cross-border transfer from China to the UAE might require multiple intermediary banks, each charging fees, taking 3 to 5 business days. Fees typically range from 1% to 3% of the transfer amount, representing significant costs for large trade settlements.
mBridge fundamentally changes this process through blockchain technology. Central banks of participating countries establish digital currency accounts on the mBridge platform, enabling peer-to-peer settlement within seconds without intermediary banks. Fees are greatly reduced, transparency is significantly improved, and all transactions are traceable on the blockchain while maintaining privacy. This 7x24 real-time settlement capability surpasses traditional systems.
The fact that 95% of transactions in mBridge are settled in digital yuan is remarkable. It means that the vast majority of transactions within this cross-border payment network use digital yuan as the settlement currency. This dominance is voluntary and based on the participating countries’ choices. China, as the world’s largest trading nation, has extensive trade with mBridge participants (Thailand, UAE, Saudi Arabia). Using digital yuan for settlement can bypass the US dollar, reducing exchange rate risks and conversion costs.
Transaction volume surges 2,500 times; SWIFT exits
The total transaction volume of $55.5 billion has surged 2,500 times since the pilot in 2022, an astonishing growth rate. In 2022, mBridge was still in the pilot stage, with a transaction volume of only about $22 million. In just over two years, the volume skyrocketed from tens of millions to hundreds of billions, indicating growing confidence and usage among participating countries.
While over 4,000 cross-border transactions may seem modest, the average transaction size is about $13.8 million. This suggests mBridge mainly serves large trade settlements and inter-institutional transfers rather than small retail payments. This positioning aligns with wholesale central bank digital currency applications and is a key battleground against SWIFT.
Notably, the Bank for International Settlements (BIS), once a key partner, exited the project in 2024, claiming it has “graduated,” possibly to distance itself from speculation about “sanctions evasion.” However, this has not slowed mBridge’s expansion. BIS’s exit is widely interpreted as a result of geopolitical pressure. As a “central bank” of Western central banks, BIS faces difficulty continuing participation in payment systems that could be used to evade sanctions under US and EU pressure.
Nevertheless, BIS’s withdrawal has not affected mBridge’s operation. On the contrary, it may accelerate its “de-Westernization.” Without BIS’s coordinating role, the People’s Bank of China effectively becomes the sole leader of the project, making decision-making more efficient and solidifying the digital yuan’s dominant position.
Core Data of mBridge
Total transaction volume: $55.5 billion (up 2,500 times from 2022)
Number of transactions: over 4,000 cross-border transactions
Average transaction size: approximately $13.8 million (mainly large trade settlements)
Digital yuan share: 95% (absolute dominance)
Participating countries: China, Hong Kong, Thailand, UAE, Saudi Arabia
Domestic digital yuan explodes 800% annually to 16.7 trillion
mBridge’s cross-border progress coincides with a domestic surge in digital yuan usage. Domestically, the total transaction volume of digital yuan has reached 16.7 trillion yuan, with an annual growth rate of over 800%. This equates to about $2.3 trillion, indicating that digital yuan usage in China has entered an explosive growth phase.
An 800% annual increase is extraordinary. It means the usage of digital yuan has grown eightfold in one year—a rare speed in the history of payment tool adoption. Even Alipay and WeChat Pay took years to reach similar growth rates in their early days. The rapid proliferation of digital yuan is driven by strong government promotion, widespread merchant acceptance, and continuous user experience improvements.
A key upgrade involves new regulations allowing banks to pay interest on digital yuan holdings, promoting its evolution from “digital cash” to a “digital deposit currency” with savings features. This is a major functional enhancement. Previously, digital yuan was positioned as a digital substitute for cash, not paying interest. Its design resembled a digital wallet balance rather than a bank deposit.
Allowing interest payments will significantly boost its attractiveness. Users can deposit idle funds in digital yuan accounts to earn interest instead of transferring to bank term deposits. This convenience will push digital yuan from a payment tool toward a store of value, greatly expanding its use cases. For internationalization, this is a crucial step, as foreign companies and individuals will prefer holding interest-earning currencies.
Strategic positioning: building a parallel option rather than directly challenging
Analysis indicates that mBridge’s strategic goal is not to directly replace the US dollar but to build a parallel, alternative cross-border payment settlement system. Its core purpose is to provide an option that reduces over-reliance on a single traditional system and enhances global trade resilience and diversity. This nuanced stance acknowledges the dollar’s current dominance while justifying mBridge’s existence.
Positioning as a “parallel option” rather than a “direct challenge” is a strategic choice. Directly challenging the dollar system could provoke strong geopolitical backlash, sanctions, or suppression. Offering an “option” appears more moderate, emphasizing increased diversity and resilience rather than overthrowing the existing order.
However, in practice, once a parallel payment system is established and matures, its impact on traditional systems is inevitable. As more countries discover they can bypass the US dollar and SWIFT for trade settlement, the dollar’s status as the world’s reserve currency will be substantially eroded. The existence of mBridge itself is a structural challenge to dollar hegemony, regardless of how this fact is framed.
The choice of participating countries is also intriguing. Thailand, UAE, and Saudi Arabia all have close trade ties with China. Saudi Arabia, as one of the largest oil exporters globally, participating in mBridge could signal the emergence of a “petro-yuan.” If oil trade begins settling in digital yuan, it could directly threaten the dollar’s dominance in oil pricing.
Diverging global digital currency paths: Agorá vs mBridge
The BIS’s exit and shift toward the Western-led “Agorá project” subtly reflect a divergence in technological and governance approaches in the global digital currency arena. Different “cliques” are exploring their own solutions. This divergence is essentially a projection of geopolitical patterns onto financial infrastructure.
The Agorá project, driven by BIS and major Western central banks, differs significantly in technical architecture and governance philosophy from mBridge. Agorá emphasizes compatibility and compliance with existing financial systems, while mBridge explores more radical new payment architectures. These differences will shape the global digital currency landscape over the coming years.
The $55.5 billion cross-border transaction volume and 16.7 trillion yuan domestic ecosystem mark a clear path of digital yuan’s “both internal and external” development. A parallel “payment network” bypassing traditional main arteries is being practically built. The underlying evolution of global currency and payment systems is underway.
