Rising transaction volumes highlight the push by China and partner central banks to build alternative settlement rails beyond the US dollar system
China’s efforts to build a cross-border digital currency network are gathering pace, with the multi central bank platform mBridge now settling more than $55 billion in transactions, underscoring growing momentum behind payment systems designed to operate outside traditional dollar based rails.
Data compiled by the Atlantic Council shows the mBridge project has processed over 4,000 cross-border transactions worth about $55.5 billion, a dramatic jump from its early pilot phase in 2022. The platform is being tested by central banks in mainland China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia, with China’s digital yuan accounting for roughly 95% of total settlement volume.
The rapid growth comes as central banks accelerate work on digital currencies to modernise cross-border payments and reduce friction in international settlements. mBridge is designed to allow participating institutions to transact directly using central bank digital currencies, avoiding the layers of correspondent banking that dominate today’s global payment system.
Digital yuan expansion drives mBridge activity
China’s digital yuan remains the backbone of the platform’s activity. Recent figures from the People’s Bank of China show the e CNY has handled more than 3.4 billion transactions worth about 16.7 trillion yuan, or $2.4 trillion, representing an increase of over 800% compared with 2023.
Beijing is also reshaping the digital yuan’s role at home. The central bank has introduced a framework that allows commercial banks to pay interest on e CNY wallet balances, a step aimed at turning the currency into a digital deposit instrument rather than a simple cash replacement. Deputy Governor Lu Lei said the shift would enable banks to integrate the e CNY into asset and liability management and support both domestic and cross-border use cases.
Analysts see the changes as part of a longer term strategy to extend the yuan’s reach through digital infrastructure. Atlantic Council analyst Alisha Chhangani said the developments point to a gradual expansion of the yuan’s international use by building parallel settlement rails that reduce reliance on existing dollar centric systems, rather than directly challenging the US currency’s dominance.
BIS steps back as geopolitics loom
mBridge has also drawn international attention over its geopolitical implications. In 2024, the Bank for International Settlements stepped back from the project it had helped develop through its Innovation Hub since 2021, calling the move a graduation rather than a withdrawal.
BIS General Manager Agustín Carstens said the organisation was distancing itself from speculation that mBridge could be used by BRICS countries to bypass international sanctions, stressing that BIS systems cannot be used by sanctioned jurisdictions. The BIS has since shifted its focus to Project Agorá, a separate initiative involving several Western central banks that has recently expanded its testing programme.
For investors and the crypto industry, mBridge’s growth signals how central bank digital currencies are moving from pilot projects into real world settlement infrastructure, reshaping how cross-border payments may work in the years ahead.
Read Also: Canaan Faces Nasdaq Delisting Risk as Share Price Slips Below $1 Threshold
