China is accelerating the development of its cross-border digital currency infrastructure as it seeks to reduce reliance on dollar-based payment systems, with growth accelerating sharply in recent years.

According to reported data, Project mBridge — a multi–central bank digital currency platform — has processed more than 4,000 cross-border transactions with a cumulative value of approximately $55.5 billion. The digital yuan accounts for around 95% of the total settlement volume, underscoring China’s dominant role within the platform.

The rapid expansion of mBridge comes alongside strong momentum in China’s domestic CBDC rollout. The People’s Bank of China said the e-CNY has processed over 3.4 billion transactions worth roughly $2.4 trillion, representing an increase of more than 800% compared with 2023.

Starting January 1, China also began allowing commercial banks to pay interest on digital yuan holdings under a new regulatory framework. This move effectively shifts the e-CNY from a form of “digital cash” to what authorities describe as a “digital deposit currency.”

In October 2024, the Bank for International Settlements (BIS) unexpectedly exited the mBridge project. BIS leadership characterized the move as a “graduation” for the platform, while distancing it from speculation that mBridge could be used by BRICS nations to circumvent sanctions. The BIS emphasized that “mBridge is not the BRICS bridge.”

The BIS is now concentrating on Project Agorá, a competing initiative involving seven Western central banks, including the Federal Reserve Bank of New York, the Bank of England, and the Bank of Japan. The project recently announced it is stepping up testing efforts.

Analysts note that while Project mBridge is unlikely to directly challenge the dominance of the U.S. dollar, it could gradually erode its influence in cross-border payments over time.