China is accelerating its push to build an alternative infrastructure for international payments. Its latest move is the commercialization of mBridge, a digital platform designed to make cross-border transactions faster and cheaper while reducing dependence on the U.S. dollar and the SWIFT network.
The system is backed by the central banks of China, Hong Kong, Thailand, the UAE, and Saudi Arabia. According to The Financial Times, a new entity will be set up in Hong Kong to oversee its operations.
The system relies on the digital yuan, which the Chinese government has been developing for several years. The central bank is transforming it into an interest-bearing deposit system designed to complete with the U.S. dollar in global payments. The broader goal is to create a digital currency swap program with China’s trading partners.
Another ambition is for China to develop its own system for facilitating trade payments independent of SWIFT. The Belgium-based messaging system connects more than 11,000 financial institutions worldwide for cross-border transactions.
Expanding mBridge
Project mBridge was launched in 2022 by a consortium of central banks led by the Bank for International Settlements (BIS), though the BIS stepped away from the project two years later. Transaction volumes on the platform have surpassed $55 billion, with the digital yuan accounting for more than 95% of that total, primarily through public sector payments. Now, the platform is shifting toward trade settlement, particularly in energy and commodity transactions.
Sources told The Financial Times that small businesses, which often find international payment systems such as SWIFT expensive and complex, are expected to embrace the mBridge platform. Fees are expected to be roughly half those charged by traditional international payment systems.
Keeping Up with Mobile Payments
China’s broader payments ecosystem also continues to evolve in parallel, reinforcing its push into cross-border finance.
Mobile payments are already deeply embedded in daily life, and the country’s central bank is, in some ways, trying to stay ahead of private sector rivals in cross-border transactions. Last year, Ant Group unveiled its own cross-border QR code network designed to provide faster and cheaper transactions, particularly for tourists.
Earlier this year, Visa cardholders gained the ability to add their cards to Apple Pay for purchases at overseas merchants, giving users in Mainland China another mobile payment option when traveling and shopping internationally.
Alongside these developments, the digital yuan continues to serve as the backbone of China’s state-backed payment strategy, with total transaction volumes reaching roughly $2.37 trillion over the past two years. To support its broader adoption, China’s government has also restricted other cryptocurrencies and tokenized assets, including yuan-backed stablecoins.
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