12 hrs ago
Saudi Arabia Exits China-Backed mBridge After Payment Trial
Saudi Arabia tested a payment system called mBridge.
The system lets banks move digital versions of money directly between countries.
Saudi Arabia finished its test on 13 May 2025 and then left the project.
Saudi officials said leaving was part of the original plan.
Some experts said countries must balance the benefits of new payment systems with concerns about US reactions.
The United States has worried that systems like mBridge could reduce reliance on traditional dollar-based networks.
Saudi Arabia’s departure happened while it was also facing conflict-related tensions involving the Houthis.
However, the reports did not prove that the conflict caused Saudi Arabia to leave mBridge.
The Saudi Central Bank completed its mBridge proof of concept on 13 May 2025 and then ceased participating.
Riyadh said the withdrawal followed its original plan, while sources said it did not signal a broader rejection of digital currencies.
mBridge uses distributed-ledger technology to enable faster and potentially cheaper cross-border payments using digital currencies.
The platform was initially developed by central banks in China, Hong Kong, Thailand, and the United Arab Emirates, with previous involvement from the Bank for International Settlements.
The withdrawal came amid US scrutiny of alternative payment systems and reports of escalating Saudi-Houthi conflict, though a direct link between the events was not established.
- Who
- The Saudi Central Bank, mBridge participants, the United States, and Houthi forces were mentioned in the reports.
- What
- Saudi Arabia completed its mBridge proof of concept and ceased being a participating member.
- Where
- The mBridge project involved central banks from China, Hong Kong, Thailand, and the United Arab Emirates; related Saudi-Houthi developments involved Bab al-Mandeb and Muscat, Oman.
- When
- The proof of concept ended on 13 May 2025; the Bank for International Settlements announced its departure in October 2024.
- Why
- Saudi Arabia said the withdrawal followed its original plan. The move also occurred amid scrutiny of alternative payment systems and reports of Saudi-Houthi conflict, but no direct causal link was established.
Geopolitical Pressure Interpretation
Planned Exit and Technical Completion
Reason for Saudi Arabia's departure
Geopolitical Pressure Interpretation
The withdrawal is viewed in the context of US scrutiny of payment systems that could reduce dependence on the dollar and increase the renminbi's international role.
Planned Exit and Technical Completion
Riyadh said leaving was part of its original plan, while sources said the decision followed completion of the proof-of-concept phase.
Possible US influence
Geopolitical Pressure Interpretation
Experts said US allies exploring alternative payment infrastructure remain sensitive to possible US pushback.
Planned Exit and Technical Completion
Sources said Saudi Arabia's exit did not necessarily reflect direct US pressure, and the reports did not establish that Washington caused the decision.
Connection to Saudi-Houthi conflict
Geopolitical Pressure Interpretation
The timing has prompted attention because the withdrawal was reported alongside claims of Houthi advances and Saudi requests for US support.
Planned Exit and Technical Completion
The reports do not demonstrate that the Saudi-Houthi conflict caused the mBridge withdrawal; the two developments may have occurred concurrently.
Key facts
- Saudi exit date
- 13 May 2025, when the Saudi Central Bank completed its proof of concept
- Platform purpose
- Direct cross-border transactions using digital versions of participating currencies
- Technology
- Distributed-ledger, or blockchain, technology
- Initial developers
- People's Bank of China, Hong Kong Monetary Authority, Bank of Thailand, and Central Bank of the United Arab Emirates
- Bank for International Settlements
- Announced in October 2024 that it was graduating out of the project
- Saudi policy implication
- Sources said the exit did not represent a broader rejection of digital currencies or necessarily reflect direct US pressure
- Conflict context
- The report appeared amid claims of Houthi advances near Bab al-Mandeb and Saudi requests for US military assistance
- Preferred source
- WION
Quotes
Eswar Prasad
Cornell University professor and Brookings senior fellow quoted by the Financial Times
“acutely sensitive to US pushback against initiatives seen as potentially reducing the dollar's importance and, even worse, boosting the Chinese renminbi's role in international finance.”
wionews.com
Sources
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