China Set to Launch mBridge CBDC Payment System, Accelerating De-Dollarization Efforts

China is preparing to launch a blockchain-based cross-border payment system powered by central bank digital currency (CBDC), a development that analysts say could reshape international transactions and reduce global reliance on the U.S. dollar.

According to the Financial Times, the initiative could "reshape cross-border transactions, reduce reliance on the dollar, and draw Beijing closer to its 'Belt and Road' trading partners."

mBridge: A Shared Ledger for Central Banks

People familiar with the matter told the Financial Times that the mBridge platform is backed by central banks in China, Hong Kong, Thailand, and the UAE. A Hong Kong-based entity will oversee its operation.

The project traces its origins to a 2021 experiment conducted under the Bank for International Settlements (BIS) Innovation Hub, which brought participating central banks together to test cross-border CBDC settlements. The BIS formally concluded its involvement in mBridge in 2024, at which point the participating central banks transitioned the platform toward independent operation.

The platform operates on a shared distributed ledger, enabling participating central banks to issue wholesale CBDCs directly rather than routing bank deposits through multiple correspondent institutions. According to analysts, mBridge has already processed approximately RMB 470 billion in transactions.

Officials close to the matter indicated that commercial banks may also access mBridge under the supervision of their respective central banks. Sources report that fees for using mBridge will be roughly half those of SWIFT and other international payment systems—a cost advantage likely to appeal to smaller businesses.

SWIFT and the Fragmentation of Global Finance

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has long functioned as the backbone of international settlements, operating as a global financial messaging service that connects over 11,000 institutions across more than 200 countries and territories. As the SWIFT website states, "SWIFT is the way the world moves value." Because the U.S. dollar serves as the world's reserve currency, SWIFT effectively underpins an international dollar-based system.

However, Gene Ma, head of China research at the Institute of International Finance, said the landscape is fragmenting into a "system of competing networks," with mBridge poised to become a significant participant.

The push toward alternatives intensified after the 2022 invasion of Ukraine, when the United States, the European Union, the UK, and Canada issued a joint statement announcing that "selected" Russian banks would be disconnected from SWIFT. This use of the dollar-dominated system as a foreign policy tool has prompted numerous countries to explore payment mechanisms that bypass the greenback entirely.

CIPS and mBridge: Complementary Systems

China already operates the Cross-Border Interbank Payment System (CIPS), established in 2015 as a more traditional renminbi-based alternative to SWIFT that reduces intermediaries and allows participating banks to clear RMB transactions more directly. Usage of CIPS has surged since the onset of the U.S.-Iran conflict, with more than 100 countries accessing the system to conduct cross-border transactions in yuan.

Analysts describe the relationship between the two systems as complementary. CIPS upgrades existing banking infrastructure, while mBridge proposes an entirely new set of rails for certain cross-border transactions. Parties using mBridge will not need dollars; settlements will occur directly in participating digital currencies, allowing users to bypass traditional banking intermediaries altogether.

Implications for the Global Monetary Order

Wang Jian, chief financial sector analyst at Guosen Securities, said mBridge could "strengthen China's voice in the global monetary order and support the internationalization of the renminbi."

While mBridge is not expected to replace SWIFT or dislodge the dollar from its reserve currency status, analysts note it could meaningfully reduce global dependence on the dollar. The United States relies on sustained international demand for dollars to support government borrowing and absorb Federal Reserve monetary expansion. A significant decline in that demand could depress the dollar's value and potentially trigger broader economic consequences.

The mBridge platform emerges amid broader de-dollarization trends, as countries from Brazil to Russia explore bilateral trade settlements in local currencies and alternative financial infrastructure. Whether additional central banks—particularly from BRICS nations—join the platform will be a key indicator of mBridge's long-term reach.