Saudi Arabia has withdrawn from mBridge, a China-backed cross-border digital currency initiative designed to facilitate direct transactions between central banks. The Saudi Central Bank (SAMA) joined the project as a full participant in June 2024 and concluded its involvement on May 13, 2025, following the completion of a proof of concept. SAMA stated that the termination of its participation was planned, as reported by the Financial Times citing a central bank statement.
Established in 2021 through a collaboration between the Bank for International Settlements (BIS) Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates, mBridge aims to make cross-border payments faster and cheaper. Unlike systems relying on a single stablecoin, the platform allows participating central banks to issue and transact in their own digital currencies on a shared ledger for payments and foreign exchange. The BIS handed over management to the participating central banks in October 2024 after reaching a minimum viable product stage, with then-BIS General Manager Agustín Carstens stating the departure was not politically motivated. US policymakers have scrutinized the project, with a 2024 report from the US-China Economic and Security Review Commission suggesting it could serve as an alternative settlement system for countries seeking to evade US sanctions.
The withdrawal of the Saudi Central Bank from mBridge signals a strategic recalibration in how Gulf states engage with China-led financial infrastructure initiatives. While SAMA characterized the exit as a planned conclusion to a proof of concept, the timing coincides with heightened geopolitical scrutiny regarding the project's potential role in circumventing US sanctions. This move suggests that major regional players may be prioritizing alignment with existing global payment architectures or maintaining neutrality over deepening integration into alternative, China-centric digital currency networks, despite the technical efficiencies offered by shared ledgers.
For the broader market structure, the loss of a significant participant like Saudi Arabia reduces the immediate momentum and network effects of the mBridge pilot. Although the project continues under the governance of the remaining central banks, including China and the UAE, the reduced scope limits its utility as a comprehensive testbed for multi-jurisdictional interoperability. Observers should monitor whether other non-Chinese participants reassess their commitments in light of US regulatory concerns, as the viability of such alternatives depends heavily on broad institutional adoption rather than isolated technical successes.
