China’s mBridge logs $69 billion outside SWIFT for cross-border payments

China is moving its blockchain-based cross-border payment and settlement platform, mBridge, closer to commercial use, with industry sources noting the system is being positioned as a direct rival to SWIFT. Reports highlight that mBridge has already processed over $69 billion in successful transactions outside of the traditional SWIFT messaging infrastructure.

Reducing reliance on the dollar

The mBridge project is at the forefront of China’s broader strategy to reduce its excessive dependence on the U.S. dollar. The network aims to boost the international use of the Chinese yuan, creating an alternative to the dominance of the dollar in global payments.

According to reports, transaction costs on the platform are estimated to be roughly half the typical fees found on the SWIFT network. This significant cost advantage could particularly benefit smaller institutions that often face high fees and extended waiting times in cross-border transactions.

Although still in its early phases, sources familiar with the matter state that a specialized legal entity based in Hong Kong will handle daily operations once mBridge transitions to a commercial status.

Central banks from Asia and the Middle East join the project

Development on mBridge began in 2021, with the inaugural trials involving the Hong Kong Monetary Authority, Bank of Thailand, People’s Bank of China, and the Central Bank of the United Arab Emirates. The Hong Kong Monetary Authority acts as Hong Kong’s de facto central banking regulator.

Following initial trials, the project expanded to include Saudi Arabia and the Bank for International Settlements. The BIS is recognized for fostering cooperation among central banks and spearheading technical research for the global financial system.

Glossary: CBDC refers to digital currencies issued by central banks. mBridge is designed to directly settle cross-border payments by using multiple countries’ CBDCs on a shared ledger infrastructure.

Currently, mBridge operates in six regions: China, Hong Kong, the United Arab Emirates, Saudi Arabia, Thailand, and, most recently, Macau. Plans are underway to expand the network to include even more countries and regions in the future.

Key advantages over SWIFT

While SWIFT still dominates cross-border payments with an annual transaction volume surpassing $150 trillion, advances in financial technology, particularly digital assets and alternative payment infrastructures, have accelerated the search for new solutions.

The principal distinction of mBridge lies in its ability to settle payments directly across multiple central bank digital currencies on a single shared ledger. This model removes the correspondent bank chain, thereby speeding up transactions. Additionally, the network is viewed as a valuable option for actors seeking alternatives to the dollar, especially those aiming to use yuan-based digital payment tools.

However, some observers point out that the bulk of mBridge’s transaction volume currently comes from flows between China and Hong Kong. This means its global impact has not yet been fully tested at scale, though the move to commercial deployment could be a significant milestone.

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