Saudi Arabia’s decision to end its participation in mBridge, the cross-border digital currency platform involving mainland China, Hong Kong, Thailand and the United Arab Emirates, is significant for reasons that go beyond central bank digital currencies. The Financial Times reported that the Saudi Central Bank, or SAMA, completed its mBridge proof of concept in May 2025 and ceased participating thereafter.

The disclosure is significant because Saudi Arabia occupied a strategically important position in an initiative increasingly associated with efforts to diversify away from dollar-centred financial infrastructure.

mBridge was created to address genuine weaknesses in cross-border payments. The platform uses central bank digital currencies and distributed ledger technology to allow participating banks to conduct cross-border payments and foreign exchange transactions more directly. It reached minimum viable product stage in 2024, when Saudi Arabia became a full participant.

For China, mBridge offers an opportunity to develop financial infrastructure in which the renminbi can play a greater role in international transactions, while for other participating economies it offers a potential means of improving payment efficiency and flexibility.

That does not necessarily mean replacing the US dollar. This distinction is becoming increasingly important as discussions about de-dollarisation often blur together several different developments.

A country can diversify its payment infrastructure without abandoning the dollar. It can expand local-currency settlement while continuing to hold dollar reserves, or deepen financial ties with China while remaining deeply integrated with US capital markets and Western financial institutions.

Saudi Arabia illustrates this dilemma precisely. Riyadh has been strengthening ties with China through trade, investment and cooperation in emerging financial technologies. At the same time, it remains deeply embedded in the dollar-based international financial system.

Its currency, the Saudi riyal, remains pegged to the US dollar, while its energy exports and international financial relationships continue to operate within an overwhelmingly dollar-centred environment. For countries in this position, the attraction of alternative payment infrastructure is therefore practical rather than necessarily ideological.

The ability to settle transactions directly in digital versions of national currencies could reduce costs and improve speed while providing additional options at a time when geopolitical tensions have made access to financial infrastructure an increasingly strategic consideration.

But the existence of an alternative does not automatically create a reason to use it. Payment systems derive much of their value from network effects. Banks and companies prefer infrastructure that connects them to the largest number of counterparties, currencies and financial institutions.

The dollar benefits not only from the size of the US economy but also from decades of accumulated liquidity, market depth, legal infrastructure and institutional familiarity.

This may be the most important lesson from Saudi Arabia’s mBridge experience. SAMA’s departure should not be interpreted as the collapse of mBridge. The project has continued to develop after the Saudi proof of concept ended. The Monetary Authority of Macau joined and activated the platform for participating banks in June, with three banks completing 23 cross-border transactions involving mainland China, Hong Kong and the UAE on the first day.

Nor was Saudi Arabia the first major institutional change for the project. The Bank for International Settlements ended its direct involvement in October 2024, arguing that mBridge had reached a stage where its central bank partners could carry the project forward independently. The BIS has also stressed that mBridge was not created as a Brics mechanism for circumventing sanctions.

The remaining challenge is therefore not simply technological. It is geopolitical and commercial. For mainland China and Hong Kong, the future value of mBridge will depend on whether the platform can attract enough participants and real-world transactions to generate meaningful network effects.

For countries such as Saudi Arabia and the UAE, participation in alternative financial infrastructure will have to be weighed against their broader relationships with the United States and the existing international financial system. This creates a more fragmented future for global payments in which countries may increasingly participate in several overlapping networks rather than move from one system to another.

That is a more complicated form of financial de-dollarisation than the dramatic headlines sometimes suggest. The real transformation may be less about the end of dollar dominance than about the gradual expansion of choice around it.

Saudi Arabia’s mBridge experience therefore demonstrates the limits of assuming that technological diversification automatically produces monetary realignment. Building an alternative payment rail is possible. Convincing major economies to make it part of their permanent financial architecture is considerably harder.

For China, this makes the next stage more demanding, requiring the project to demonstrate that faster, cheaper and more direct cross-border settlement can deliver sufficient economic value to overcome the network advantages of the existing system.

The future of international payments may ultimately not be a contest between the dollar and its alternatives. It may be a world in which countries increasingly use both, choosing between different financial networks according to the transaction, the counterparty and the geopolitical circumstances. That would represent a significant change in global finance, even if the dollar remains at its centre.