China to roll out Mbridge from Hong Kong to promote digital yuan

China plans to commercialize Mbridge via a Hong Kong-based entity to expand international use of the digital yuan and offer an alternative to existing cross-border payment systems. The platform has processed roughly 470 billion yuan (about $69 billion) in cross-border settlements to date.

Mbridge is a blockchain-enabled system built to settle cross-border central bank digital currency (CBDC) payments. Development began in 2021 with participation from China, Hong Kong, Thailand, the United Arab Emirates, Saudi Arabia and the Bank for International Settlements (BIS). The platform reached a minimum viable product stage in 2024.

In 2024 Mbridge handled its first recorded Digital Dirham cross-border transfer when Sheikh Mansour Bin Zayed Al Nahyan, chairman of the UAE central bank’s board, sent 50 million digital dirhams (about $13.6 million) to China.

The BIS left the partnership in 2024 after raising concerns about the project. Chinese officials and financial firms continued testing and development after the BIS exit and are preparing to expand use cases and on-board more counterparties through the planned Hong Kong vehicle.

Chinese authorities plan to set up the Hong Kong entity to market Mbridge to banks and other financial institutions. Officials expect the new entity to handle commercial operations, onboarding and pricing. The platform will be promoted as charging roughly half the fees of traditional networks such as SWIFT, according to participants involved in the project.

Developers say Mbridge enables direct CBDC-to-CBDC settlement on distributed ledgers, which removes some intermediary layers used in conventional cross-border transfers. They describe the design as aiming to lower fees and shorten settlement times compared with legacy messaging networks.

China already operates the Cross-Border Interbank Payment System (CIPS) for conventional yuan payments, launched in 2015. Mbridge is presented as a system that would handle digital central bank money natively on blockchain rails rather than using conventional payment messaging.

Wang Jian, chief financial sector analyst at Guosen Securities, noted that wider adoption of Mbridge could speed cash turnover, lower the risk of liquidity strains and support greater use of the renminbi in international payments.

The planned commercial rollout will test whether a China-led CBDC settlement network can attract international partners at scale and operate alongside existing cross-border payment infrastructures.