In spite of its bad rep and the regular news about its imminent end, the dollar-based international financial system has so far stubbornly refused to die.
The approaching summer brought renewed interest to the fate of the dollar. But then again, the apocalypse won’t happen just yet.
On the other hand, China’s old-new mBridge cross-border payment platform might nowhere near to be a real challenger to the dollar-based world. It hasn’t been this far, and it still does not.
But the platform – backed by the central banks of China, Hong Kong, Thailand, the UAE and Saudi Arabia – is now gradually becoming practical.
According to the latest announcements, China is reportedly preparing the commercial launch (though no clear date is set yet, beyond the vague “the preparations are in their advanced stages”). It is expected to appeal to smaller businesses “that find payment systems like SWIFT too costly and difficult to use”.
For most of its existence, mBridge enjoyed theoretical importance – the type that generates endless conferences, white papers, working groups and PowerPoint presentations. It started as a 2022 pilot handling a mere US $22 million.
Central banks were experimenting with digital currencies. Blockchain was involved. Future efficiencies were discussed.
One of the many possibilities, but nothing else.
With the recent global developments, the theoretically important project suddenly became politically relevant.
The United States has spent decades building the most powerful financial ecosystem in human history. The dollar dominates trade, debt markets, reserves and international transactions. SWIFT became the center of global finance. Access to American markets became one of the most valuable economic privileges available to any country.
This system delivered enormous benefits. It reduced transaction costs, increased liquidity and created a common language for global commerce.
Recent developments became eye openers.
Suddenly, the participants noticed that the owner of the system possessed a very large switch.
The freezing of Russian reserves after the invasion of Ukraine was a watershed moment for many.
One does not need to agree with Moscow’s motivations to understand why policymakers in Beijing, Riyadh, Abu Dhabi, New Delhi or dozens of other capitals paid close attention.
The lesson was simple.
If geopolitical tensions become severe enough, access to the existing financial architecture can become uncertain. This is where mBridge suddenly steps into the limelight.
A backup plan even for those who (at the moment, at least) have no intentions to leave the dollar-based world.
In fact, most have no intention at all of abandoning it.
The dollar remains unmatched, because in spite of the recent unpredictability of American politics, American financial markets remain deeper, more liquid and more trusted than any alternative. The renminbi is nowhere near replacing it.
But replacing the dollar and reducing dependence on the dollar are two very different objectives.
A country may happily use the existing system while simultaneously building an escape route. And global tensions (e.g. the rivalry between Washington and Beijing) continue to generate demand for such insurance.
A sort of strategic infrastructure – the financial equivalent of the Svalbard Global Seed Vault. Though with far more substantial obstacles.
Chinese institutions don’t enjoy the same level of trust investors place on their American counterparts. Or on the legal framework supporting them.
Collecting seeds is easy. Building a reservoir of global trust is far harder.
But just like rarely threaded paths that grow into highways in a jungle, mBridge is building that trust step by step, one transaction at a time.
Thanks to the growing perception that the world is becoming less predictable, less cooperative and more fragmented, more countries appear uncomfortable relying exclusively on the existing system.
As geopolitical tensions rise, the value of alternatives rises with them.
Once a small pilot program, by November 2025, mBridge had processed 4,047 transatcions worth about US $55.49 billion and has entered live government use.
And it’s growing.
