mBridge: Saudi Arabia's Exit From the CBDC Payments Project

The problem behind a cross-border payment

A domestic payment can often move within one banking and settlement system. An international payment may involve banks operating under different currencies, laws and business hours. When the sender's and recipient's banks lack a direct relationship, they use intermediary banks. These are known as correspondent banks. Each additional institution may need to process instructions, check compliance and update its records. The result can be a longer route between sending money and making it available to the recipient.

Changing currencies introduces a further problem. One party may deliver its currency before receiving the other currency in return. This creates settlement risk: the possibility that an agreed exchange will not be completed as expected. Faster messaging alone cannot remove that risk. The underlying transfer of value must also be coordinated. mBridge tests whether a shared platform can simplify these connections while allowing the participating central banks to retain control of their currencies.

What is being put on the platform?

A central bank digital currency is digital money issued by a central bank. It is different from a privately issued cryptocurrency whose value and governance follow other arrangements. mBridge focuses on wholesale use, involving authorised financial institutions and cross-border settlement. It is not principally a shopping application or a new currency offered to everyone. A digital version of one country's currency also remains distinct from the digital currencies issued by other participants.

The project uses a shared ledger to record transactions across its participating jurisdictions. A ledger is the record of who holds value and how that value moves. Access is controlled, rather than open to any anonymous internet user. Participating central banks have roles in validating transactions and issuing their respective currencies. Commercial banks can then use the platform for permitted transactions. Common infrastructure therefore does not mean that several national currencies have merged into one.

From an experiment to a working prototype

The project began in 2021 with the Bank for International Settlements Innovation Hub and four monetary authorities. Two were the Bank of Thailand and Hong Kong Monetary Authority. The others were the United Arab Emirates' central bank and the People's Bank of China's Digital Currency Institute. Their involvement brought together different legal and monetary systems. That diversity was central to the experiment: a purely domestic demonstration would not answer the problems involved in cross-border settlement.

By June 2024, the partners announced a minimum viable product, and Saudi Arabia joined as a full participant. This stage means a sufficiently developed system for further real-world testing and refinement. It is not the same as universal commercial availability. The Saudi central bank's announcement described participation as part of assessing wholesale digital currencies. An experiment can provide useful knowledge even when a participant later chooses not to continue with that particular arrangement.

The Bank for International Settlements subsequently described mBridge as graduating from its innovation programme. In October 2024, its general manager explained that it had been created to meet broad central-bank needs. That statement identifies the institution's own position at the time. The later Saudi report should be read against this changing participation history. A partner's exit and an innovation sponsor's graduation are different events, not interchangeable descriptions of a single collapse.

Technical speed is only part of the test

Putting several currencies on one platform can reduce intermediate steps, but it does not create unlimited access to foreign money. Banks still need liquidity: enough of the required currency at the required time. A payment system also needs a way to establish exchange rates and coordinate both sides of an exchange. The project's earlier pilot identified practical limits involving operating hours and foreign-exchange arrangements. These are design questions that remain important even when the technology processes individual transfers quickly.

Legal and governance questions are equally important. Participants must know who may enter the system, which transactions are allowed and when a transfer becomes final. Rules must also address privacy, compliance and responsibility when something goes wrong. A technically successful test cannot by itself settle these questions for every jurisdiction. Their resolution requires agreement among institutions with different domestic obligations.

This is why claims about replacing the dollar need particular care. A payment platform describes how money moves; currency use also depends on trade contracts, markets and financial choices. Providing a route for direct currency settlement does not prove that businesses will switch their invoices or reserves. Likewise, a departure from the experiment does not independently establish its political motive. The Saudi explanation reported in September was completion of the proof-of-concept phase; broader interpretations require separate evidence.

Conclusion

The mBridge development concerns both a specific participation decision and a wider attempt to improve international payments. The useful question is not whether one platform instantly replaces the existing financial system. It is whether a workable combination of technology, liquidity, legal certainty and institutional participation can reduce real payment problems. Saudi Arabia's reported departure narrows its role in this experiment, while leaving those underlying problems and research questions unresolved.