Saudi Arabia Quietly Exits China's mBridge Platform in Setback for De-Dollarization Push

Saudi Arabia's central bank has quietly withdrawn from mBridge, the China led cross border digital payment platform, according to a report by the Financial Times, in what is being described as another setback for Beijing's effort to reduce the world's reliance on the US dollar. China has promoted mBridge as a potential alternative to the dollar dominated SWIFT messaging system that underpins most international bank transfers.

What mBridge is

China launched mBridge in 2021 to let central banks settle cross border transactions directly using digital currencies built on blockchain technology, bypassing conventional dollar clearing channels. The initial participants included mainland China, Hong Kong, Thailand, the United Arab Emirates and the Bank for International Settlements, often described as the central bank for the world's central banks. Saudi Arabia's central bank, known as SAMA, later joined the platform as well, but is reported to have exited quietly last year.

An exit from the petrodollar system

Saudi Arabia has long been regarded as one of the key pillars underpinning the dollar's global dominance. For decades, the Saudi riyal has been pegged to the dollar and the kingdom's oil exports have been priced and settled in dollars, a setup often referred to as the petrodollar system that has helped anchor the currency's central role in global trade and reserves. Against that backdrop, SAMA's exit from a China led alternative payment platform is being read by some as a symbolically significant signal: even as strategic competition between Washington and Beijing intensifies and the push to internationalize the yuan continues, Saudi Arabia appears inclined to keep its monetary and financial infrastructure closely tied to the existing dollar centered system rather than commit to a China led alternative.