Saudi Arabia Quietly Exits China-Backed mBridge CBDC Project

Saudi Arabia’s central bank has withdrawn from mBridge, the China-backed platform for cross-border central bank digital currencies, after completing a proof-of-concept phase, the Financial Times reported. The exit shrinks the geographic footprint of a system that US policymakers have repeatedly flagged as a potential channel for evading sanctions, and it raises fresh questions about how far Gulf states are willing to go in aligning payment infrastructure with Beijing.

A Multilateral Experiment Loses a Member

The Saudi Central Bank, known as SAMA, joined mBridge as a full participant in June 2024, roughly three years after the project was first established in 2021 under the Bank for International Settlements’ Innovation Hub. mBridge was built with the central banks of China, Hong Kong, Thailand and the United Arab Emirates, with the goal of letting participating countries settle cross-border payments directly using multiple central bank digital currencies on a shared ledger — cutting out the layers of correspondent banks that typically slow and add cost to international transfers.

According to the facts reported by the Financial Times, SAMA completed its proof of concept on May 13, 2025, and has since left the project. That timeline places the Saudi departure well after the BIS itself stepped back from mBridge in October 2024, once the platform reached what the institution described as minimum viable product stage. At the time, then-BIS General Manager Agustín Carstens denied that the BIS exit was politically motivated, framing it instead as a natural handover to the founding central banks now that the technical groundwork was in place.

With the BIS gone and Saudi Arabia now also out, mBridge’s remaining core participants are China, Hong Kong, Thailand and the UAE — a narrower coalition than the one that existed when the project drew the most attention from Washington.

Why Washington Was Watching

The concern in US policy circles has never been subtle. A 2024 report from the US-China Economic and Security Review Commission warned explicitly that mBridge could give participating countries a way to bypass US sanctions by settling trade and capital flows outside the dollar-based correspondent banking system that Washington uses to enforce them. A platform that lets central banks exchange digital currencies directly, without routing transactions through US-regulated intermediaries, reduces the visibility and leverage that sanctions regimes depend on.

Saudi Arabia’s participation was therefore always going to draw scrutiny beyond the technical merits of the project. The kingdom sits at the center of global oil markets and has deep, decades-old financial ties to the United States, even as it has simultaneously pursued closer economic cooperation with China. Its decision to join mBridge in mid-2024 was read by some observers as a sign that Gulf states were hedging their bets on future payment infrastructure. Its exit less than a year later suggests those bets are not fixed, and that the calculus around aligning with a China-led settlement system carries costs SAMA was not prepared to absorb long term — though the facts available do not specify what drove the decision.

The episode sits alongside a broader pattern of central banks and monetary authorities testing, and sometimes retreating from, cross-border digital-currency infrastructure that could route around established dollar clearing channels. Brazil, for instance, recently moved to bar stablecoins from a key leg of its cross-border FX settlement process, another sign that regulators are actively drawing lines around which digital-asset rails they will allow into sensitive payment corridors. Meanwhile, European institutions have taken a different tack, with the European Central Bank building its own settlement infrastructure for tokenized assets through its new Pontes platform, a project that aims to settle tokenized instruments directly in euros.

What Comes Next

China’s own regulatory posture toward digital settlement tools outside its direct control adds another layer to the story. The People’s Bank of China has been tightening scrutiny of stablecoins used in cross-border payments; a PBoC official, Wang Xin, called in June for stricter monitoring and greater international coordination, building on earlier restrictions targeting unauthorized renminbi-pegged stablecoins. That suggests Beijing wants cross-border digital settlement to run through channels it controls — like mBridge — rather than through privately issued tokens, even as key partners in that very project step back.

Several things are worth watching from here. First, whether Thailand, Hong Kong or the UAE follow Saudi Arabia’s lead, or instead deepen their commitment now that the platform has moved past the BIS-led development phase. Second, whether SAMA or other Gulf central banks pursue parallel arrangements — bilateral CBDC links or other settlement pilots — that achieve similar aims without the geopolitical exposure of a China-anchored multilateral system. Third, how US regulators and lawmakers respond publicly, given that the Economic and Security Review Commission has already put mBridge on record as a sanctions-evasion risk. Finally, the pace at which central banks generally continue experimenting with tokenized settlement — a trend visible in projects well beyond mBridge, including asset tokenization efforts documented in the ECB’s expanding role as both operator and buyer in tokenized bond markets. None of this points to a single trajectory for cross-border CBDC infrastructure, but Saudi Arabia’s exit is a concrete data point showing that participation in these systems remains reversible, contingent, and closely tied to the wider geopolitics of payments.

Source: Cointelegraph

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