Lede
The multi-central bank digital currency (CBDC) platform known as mBridge has reached a significant operational milestone, processing more than $55 billion in total transaction volume. According to data compiled by the Atlantic Council, the platform has successfully settled more than 4,000 cross-border transactions, with a cumulative value now reaching approximately $55.5 billion. This surge represents a nearly 2,500-fold increase in transaction volume since the project’s early pilot phase began in 2022. The platform’s rapid scaling highlights the growing momentum behind alternative international payment rails that operate outside traditional dollar-based systems. This expansion demonstrates the technical viability of using digital currencies for high-value international trade settlements between diverse financial jurisdictions.
Currently, the mBridge project is undergoing rigorous testing with a consortium of central banks across several jurisdictions. The participating institutions include the central banks of mainland China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia. This diverse group of participants underscores the platform’s role in facilitating cross-border settlements across different geographic and economic regions. The expansion of mBridge comes as various nations seek to enhance the efficiency of international financial transfers through the use of shared ledger technology and sovereign digital currencies. The platform serves as a collaborative environment where central banks can test the interoperability of their respective digital assets in a controlled, multi-lateral setting to ensure stability and efficiency in cross-border settlements.
Context
The dominance of China’s digital yuan, or e-CNY, is a defining characteristic of the mBridge ecosystem. Estimates suggest that the e-CNY accounts for approximately 95% of the total settlement volume on the platform. This high level of participation reflects China’s broader efforts to scale its domestic CBDC infrastructure alongside its international ambitions. Recent figures released by the People’s Bank of China indicate that the digital yuan has processed more than 3.4 billion transactions domestically. These transactions carry a total value of roughly 16.7 trillion yuan, which is equivalent to approximately $2.4 trillion in total value moved through the system.
The growth of the e-CNY has been substantial over the past year, with transaction volumes increasing by more than 800% compared to 2023 levels. This rapid adoption within China provides a robust foundation for the currency’s integration into international platforms like mBridge. Atlantic Council analyst Alisha Chhangani noted that these developments point to a gradual expansion of the yuan’s internationalization through digital infrastructure. Rather than directly challenging existing global financial systems, the project allows participants to build parallel settlement rails. This approach reduces dependence on traditional dollar-centric financial systems by providing an alternative pathway for sovereign digital asset exchange and settlement between the participating central banks. This infrastructure allows for the direct exchange of local digital currencies, bypassing the need for intermediary conversion steps that are often required in traditional cross-border payment models.
Impact
Significant structural changes are being implemented to the digital yuan’s framework, which may have long-term impacts on how the currency is used both domestically and internationally. The People’s Bank of China has announced plans to allow commercial banks to pay interest on digital yuan wallet balances. This shift is designed to move the e-CNY beyond its initial role as a simple, cash-like payment tool and into a more integrated financial asset. By integrating the digital yuan into the asset and liability management of commercial banks, the central bank aims to deepen the currency’s utility and acceptance within the broader financial system.
PBOC Deputy Governor Lu Lei has stated that the e-CNY will transition into what is described as a “digital deposit currency.” This transition expands the currency’s functional role to include value storage and more complex cross-border payments, in addition to everyday consumer transactions. By allowing interest payments, the digital yuan becomes more comparable to traditional bank deposits, potentially increasing its attractiveness to both individual users and institutional entities. This evolution is a key component of China’s strategy to broaden the applications of its digital currency, ensuring it can support a wider range of financial activities and settlement needs within the mBridge framework and the global digital economy. The transition towards a digital deposit currency signifies a move towards broader financial integration, allowing the digital yuan to be used as a more versatile instrument in both consumer and corporate finance.
Outlook
The future trajectory of mBridge is being shaped by changes in its organizational leadership and the broader geopolitical landscape. In 2024, the Bank for International Settlements (BIS) officially stepped back from the mBridge project. The BIS, which had been a key partner in developing the platform through its Innovation Hub since 2021, described this move as a “graduation” for the project rather than a full withdrawal. BIS General Manager Agustín Carstens addressed speculation regarding the project’s potential use by BRICS nations to bypass international sanctions. Carstens clarified that the systems managed by the BIS cannot be used by sanctioned countries, stating explicitly that mBridge is not the “BRICS bridge” as some had speculated.
Following its departure from mBridge, the BIS has shifted its primary focus to Project Agorá. This separate initiative involves several major Western central banks and explores different aspects of digital currency and settlement. While the BIS has moved on to other projects, mBridge continues to operate under the guidance of its remaining central bank participants. The platform’s ability to maintain its growth trajectory without the direct involvement of the BIS will be a key factor to watch. As participants from mainland China, Hong Kong, Thailand, the UAE, and Saudi Arabia continue to test and refine the system, the project remains a central piece of the global effort to develop multi-lateral CBDC infrastructures for cross-border trade. The project’s evolution serves as a case study for how multi-national digital currency platforms can develop independently once they have reached a certain level of technical and operational maturity.
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