China nears commercial launch of mBridge payments platform

China Launches mBridge Digital Payments Platform to Rival Dollar-Based Systems

China is moving to commercially launch mBridge, a cross-border digital currency platform backed by five central banks, in a bid to offer a cheaper and faster alternative to dollar-dominated payment networks like SWIFT. The platform, which uses blockchain technology to settle transactions in seconds, is being positioned as a tool to reduce reliance on the U.S. dollar as an intermediary in international trade.

A New Payments Architecture Takes Shape

The mBridge platform brings together the People’s Bank of China, the Hong Kong Monetary Authority, and the central banks of Thailand, the United Arab Emirates, and Saudi Arabia. A dedicated legal entity will be established in Hong Kong to oversee operations, the Financial Times reported, citing people familiar with the preparations.newsmax

Fees on the platform are expected to run at roughly half those charged by conventional systems, a pricing strategy aimed at small and medium-sized enterprises that have long found cross-border payments prohibitively expensive. The system enables participating central banks to transact directly using their respective digital currencies, cutting foreign exchange settlement times to seconds.kucoin

The platform has already processed cumulative transactions worth approximately 470 billion yuan ($69 billion), according to sources familiar with the project. Atlantic Council data show more than 4,000 cross-border transactions have been completed, with China’s digital yuan accounting for about 95 percent of settlement volume.logos-pres

Iran Conflict Accelerates Yuan’s Rise

The commercial launch comes as Beijing’s broader campaign to internationalize the renminbi gains momentum, fueled in part by the war in Iran. China’s Cross-border Interbank Payment System (CIPS) saw its average daily transaction volume reach a record 920.5 billion yuan ($134 billion) in March 2026, according to data tracked by the Atlantic Council.ft

“The Middle East conflict may have acted as a catalyst,” Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, told the South China Morning Post, citing rising demand for yuan settlement, particularly in oil trade.scmp

The yuan has strengthened steadily this year, climbing to a three-year high against the dollar in late May before easing slightly. As of mid-June, it was trading near 6.76 per dollar. Several global banks have raised their yuan forecasts, with HSBC projecting the currency could reach 6.65 per dollar by year-end.tradingeconomics

From BIS Experiment to China-Led System

Originally launched in 2021 under the Bank for International Settlements Innovation Hub, mBridge faced criticism from U.S. policymakers who feared it could be used to circumvent dollar sanctions. In 2024, the BIS transferred governance of the project to the participating central banks. Analysts at the Atlantic Council said mBridge is unlikely to dethrone the dollar outright but could erode its centrality in specific corridors, particularly energy and commodity trade between China and the Gulf.bis