{"id":631867,"date":"2026-09-21T23:14:26","date_gmt":"2026-09-21T23:14:26","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/631867\/"},"modified":"2026-09-21T23:14:26","modified_gmt":"2026-09-21T23:14:26","slug":"china-suffers-setback-to-dedollarize-global-finance-as-saudi-arabia-exits-beijings-payment-scheme","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/631867\/","title":{"rendered":"China suffers setback to dedollarize global finance as Saudi Arabia exits Beijing’s payment scheme"},"content":{"rendered":"

Saudi Arabia quietly dropped out of China\u2019s mBridge digital payment platform, which Beijing has touted as\u00a0an alternative to the dollar-dominated SWIFT system, according to the Financial Times<\/a>.<\/p>\n

China launched mBridge in 2021, enabling central banks to use digital currencies to carry out transactions directly via blockchain technology.<\/p>\n

China, Hong Kong, Thailand, the United Arab Emirates and the Bank for International Settlements (BIS), the so-called central bank for global central banks, initially signed up. <\/p>\n

Saudi Arabia told the FT that its central bank, also known as SAMA, first joined \u201cmBridge under the umbrella of BIS as an observing member\u201d in 2023 as part of its research into central bank digital currencies, then participated in efforts in 2024 to create a proof of concept.<\/p>\n

\u201cAs planned, SAMA successfully completed its mBridge [proof of concept] on 13 May 2025. Following the completion of the PoC, SAMA is no longer a participating member of mBridge,\u201d a statement from the central bank said.<\/p>\n

A source also told the FT that the Saudi Central Bank no longer wanted to be publicly involved with mBridge. When asked if the kingdom came under U.S. pressure to withdraw, another source said it would be \u201cinaccurate to draw any wider inference.\u201d<\/p>\n

That\u2019s after the BIS left mBridge in October 2024 as the U.S. reportedly lobbied it to exit<\/a>. But the BIS said it had \u201cgraduated out\u201d and denied there were any political considerations. \u00a0<\/p>\n

Saudi Arabia\u2019s initial participation was seen as a major win for mBridge as the oil-producing giant serves as the foundation of today\u2019s \u201cpetrodollar\u201d regime that goes back to a deal struck in 1974, when Riyadh agreed to price its oil in dollars and invest surpluses in U.S. assets.<\/p>\n

The petrodollar eventually spilled over to other areas of commerce, and the greenback is now used in about 90% of global transactions.<\/p>\n

Because oil is a core input to global manufacturing and transport, supply chains have a natural incentive to dollarize. Indeed, Mideast oil and gas is used to make petrochemicals, fertilizer, and even helium, which is critical to chipmaking.<\/p>\n

\u201cThe world saves in dollars in large part because it pays in dollars,\u201d Deutsche Bank said in note<\/a> in March. \u201cThe dollar\u2019s dominance in cross-border trade is arguably built on the petrodollar: globally traded oil is priced and invoiced in USD.\u201d<\/p>\n

Still, the greenback has faced challenges, especially after U.S. sanctions cut off Russia from the dollar-based financial system in response to the Kremlin\u2019s invasion of Ukraine in 2022.<\/p>\n

Other countries feared they may one day be targeted with similar sanctions and have been reducing reliance on the dollar-denominated assets. Central banks, for example, have been loading up on gold in recent years while trimming their holdings of U.S. Treasuries.<\/p>\n

Saudi Arabia has even flirted with pricing some of its oil sales to China in yuan<\/a>. Meanwhile, Iran and Russia are using the Chinese currency to get around U.S. sanctions.<\/p>\n

The Iran war could put further strain on the dollar. If Iran succeeds in forcing other countries to <\/a>secure safe passage via the Strait of Hormuz by paying Tehran in yuan, Deutsche Bank<\/a> warned it could give rise to the \u201cpetroyuan.\u201d<\/a><\/p>\n

\u201cThe current conflict may expose further fault lines, by challenging the U.S. security umbrella for Gulf infrastructure and the maritime security for global trade in oil,\u201d analysts added.<\/p>\n

Meanwhile, Beijing has extended currency swap agreements with other central banks and promoted yuan-based transactions with top trade partners to further weaken the dollar\u2019s dominance.<\/p>\n

And mBridge has been making gains despite the departures of Saudi Arabia and the BIS, while adding Macau as a participant recently. <\/p>\n

A report from the Atlantic Council early this year found that transactions on the platform had surged to more than $55 billion, representing a\u00a0roughly 2,500-fold increase since 2022.<\/p>\n

\u201cProject mBridge is unlikely to challenge dollar dominance directly, but it may \u200cincrementally \u200cerode it,\u201d the Atlantic Council\u2019s Alisha Chhangani told Reuters<\/a> in January.<\/p>\n","protected":false},"excerpt":{"rendered":"Saudi Arabia quietly dropped out of China\u2019s mBridge digital payment platform, which Beijing has touted as\u00a0an alternative to…\n","protected":false},"author":2,"featured_media":631868,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,114,1096,113,61,60,383,66080],"class_list":["post-631867","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-china","tag-currency","tag-economy","tag-ie","tag-ireland","tag-saudi-arabia","tag-yuan"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/631867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=631867"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/631867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/631868"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=631867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=631867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=631867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}