RIYADH -UNS: Saudi Arabia has withdrawn from mBridge, a China-led cross-border digital payments initiative designed to enable central banks to conduct transactions directly using digital currencies, reducing the need for traditional intermediary currencies and payment infrastructure dominated by the US dollar.
The withdrawal was disclosed by the Financial Times on 20 September 2026, although the Saudi Central Bank, known as SAMA, says its participation ended in May 2025 after it completed a planned proof-of-concept exercise.
The timing of the disclosure has nevertheless raised a broader geopolitical question: was Riyadh’s departure simply the completion of a technical experiment, or did Saudi Arabia also take account of growing American sensitivity towards China’s attempts to develop alternatives to dollar-centred financial infrastructure?
That question has become more significant as Saudi Arabia faces renewed military pressure from the Iran-backed Houthi movement and simultaneously seeks deeper security and defence cooperation with the United States.
What is mBridge?
mBridge is an international central-bank digital currency project initially developed under the auspices of the Bank for International Settlements’ Innovation Hub, together with the People’s Bank of China, the Hong Kong Monetary Authority, the Bank of Thailand and the Central Bank of the United Arab Emirates.
Its purpose is not formally to abolish the US dollar.
Rather, the technology allows participating central banks to settle cross-border transactions directly through digital versions of their respective currencies. This can potentially reduce transaction times, costs and reliance on correspondent banks and conventional dollar-based payment channels.
The strategic significance is therefore considerable.
A sufficiently developed system could allow some international transactions to take place without passing through the traditional dollar-centred financial architecture.
For Washington, such technology has obvious geopolitical implications because the dollar’s international role is closely connected to the global financial system, including payment networks, correspondent banking and sanctions enforcement.
Saudi Arabia entered mBridge as an observer in 2023, subsequently becoming an active participant in developing the minimum viable version of the platform and conducting a proof of concept in 2024–25.
SAMA says that the proof of concept was successfully completed on 13 May 2025, after which Saudi Arabia ceased to be a participating member. The central bank describes the departure as part of the original plan.
That distinction matters.
The available evidence does not establish that Riyadh suddenly abandoned the project in September 2026. The withdrawal occurred in 2025; what is new is its public disclosure.
Why does the dollar matter?
The importance of mBridge lies less in replacing the dollar overnight than in the possibility of gradually reducing the dollar’s role in selected cross-border transactions.
The US dollar remains deeply embedded in global trade, financial markets, central-bank reserves and international banking. A digital settlement platform such as mBridge does not, by itself, create a fully independent alternative monetary system.
Nevertheless, it represents part of a wider international effort to develop payment infrastructure that can operate with fewer intermediaries.
That is why the project has attracted attention in Washington.
The Financial Times reported that US officials and policymakers have been sensitive to initiatives that could reduce reliance on dollar-based systems or increase the international role of China’s renminbi. The report also noted that Saudi Arabia no longer wished to be publicly associated with the project, although a source familiar with the matter cautioned against drawing a wider political inference from the decision.
Was Saudi Arabia responding to US pressure?
This is the central question — and at present the answer cannot be established from publicly available evidence.
There are three separate facts that should not be automatically turned into one conclusion.
First, Saudi Arabia has withdrawn from mBridge.
Second, Washington has strategic concerns about Chinese-led financial infrastructure that could weaken the dollar’s central position.
Third, Riyadh is simultaneously seeking closer security and defence cooperation with the United States while confronting an increasingly serious Houthi threat.
The sequence is politically significant.
But a sequence is not proof of a bargain.
No publicly available Saudi or American document establishes that Riyadh was offered military assistance against the Houthis in exchange for leaving mBridge.
Indeed, the Saudi Central Bank’s official explanation is straightforward: the Kingdom completed its planned proof of concept in May 2025 and then left the programme.
At the same time, the Financial Times reported that a person familiar with the matter indicated that Saudi Arabia no longer wanted to be publicly involved with mBridge, while suggesting that engagement with the project could continue more discreetly. That makes the episode more complicated than a simple “Saudi Arabia abandoned China” narrative.
The Houthi factor
The military context is nevertheless impossible to ignore.
Saudi Arabia is currently facing renewed attacks by the Houthis, including drone and missile threats against Saudi territory and energy infrastructure. The conflict has also affected the Red Sea and the Bab el-Mandeb, one of the world’s strategically important maritime chokepoints.
Reuters reported on 17 September that Saudi Arabia had sought China’s intervention over the Houthi threat, prompting Beijing to press Iran to use its influence to restrain the movement.
That development is particularly revealing.
If Riyadh were simply choosing Washington over Beijing, it would be difficult to explain why Saudi Arabia was simultaneously asking China to use its relationship with Iran to help contain the Houthis.
In reality, Riyadh appears to be pursuing several channels at once.
The Kingdom needs American military capabilities and security cooperation.
It also has important economic and strategic relations with China.
And Beijing has its own interest in preventing instability along the Red Sea because disruption to shipping threatens Chinese energy supplies and international trade.
Washington’s military relationship with Riyadh
The US-Saudi security relationship has also been developing against the background of the Houthi crisis.
Recent reporting indicates that Washington is considering a major defence relationship with Riyadh, including a proposed sale of 48 F-35A fighter aircraft, alongside engines, training, logistics and other support, with an estimated value of approximately $24.3 billion.
The proposal remains subject to the relevant US political and regulatory processes.
The significance of such cooperation goes far beyond the aircraft themselves.
The F-35 involves highly sensitive technology, secure communications, electronic warfare capabilities and an extensive logistics ecosystem.
For Washington, closer defence cooperation with Saudi Arabia therefore inevitably intersects with another strategic concern: Riyadh’s expanding relationship with Beijing.
The United States has long been attentive to the possibility that Chinese access to sensitive infrastructure, telecommunications networks or military-related technology could create intelligence and security risks.
That creates a difficult balancing act for Saudi Arabia.
Riyadh’s balancing strategy
Saudi foreign policy increasingly operates on the principle of maintaining multiple strategic relationships rather than choosing a single great-power camp.
China is Saudi Arabia’s major economic partner and an important customer for its energy exports.
The United States remains the Kingdom’s principal external security partner and a major source of advanced military technology.
Neither relationship can easily be replaced by the other.
Saudi Arabia therefore has an incentive to avoid becoming excessively dependent on either power.
From this perspective, leaving mBridge could be interpreted as a tactical adjustment designed to reduce friction with Washington without necessarily representing a strategic break with Beijing.
The fact that Saudi Arabia completed the technical experiment before leaving is also significant.
Riyadh gained experience with the technology, participated in its development and tested its practical applications.
The Kingdom can therefore retain knowledge acquired during the programme while avoiding the political symbolism of remaining a formal participant.
China is not being pushed out
There is also little evidence that Saudi Arabia is abandoning its relationship with China.
Beijing remains deeply involved in Saudi economic development, infrastructure, energy and investment.
More importantly, the current Houthi crisis demonstrates that Saudi Arabia still sees China as possessing diplomatic leverage that can be useful in the Middle East.
Reuters’ reporting that Riyadh sought Chinese help to restrain the Houthis illustrates this point clearly.
Saudi Arabia’s withdrawal from one China-led financial project should therefore not automatically be interpreted as a broader strategic realignment.
It may instead represent selective decoupling in sensitive areas while economic and diplomatic cooperation continues elsewhere.
What does this mean for the dollar?
The mBridge episode should also be kept in perspective.
Saudi Arabia leaving the project does not end China’s effort to build alternative cross-border payment infrastructure.
The platform continues to involve China, Hong Kong, Thailand, the UAE and Macau, and has moved towards broader operational use. Macau joined the system in 2026, with the platform beginning transactions there in June.
Nor does Saudi Arabia’s withdrawal guarantee that the dollar will retain its current position indefinitely.
The broader international payments landscape is evolving through several parallel initiatives involving central-bank digital currencies, instant-payment systems and alternative settlement mechanisms.
The more important long-term question is therefore not whether mBridge will “kill the dollar”.
It is whether a growing number of alternative systems can gradually reduce the number of international transactions that require the dollar as an intermediary.
That is a much slower and more complex process.
The military dimension
From a military-strategic perspective, the most important development is not mBridge itself but the intersection between financial alignment, defence technology and regional security.
Saudi Arabia is confronting a direct missile and drone threat.
The Kingdom requires sophisticated air and missile defence, intelligence, surveillance and reconnaissance capabilities, electronic warfare, secure communications and protection of critical energy infrastructure.
The United States possesses capabilities in many of these areas that China cannot simply substitute for overnight.
At the same time, Saudi Arabia has demonstrated that it does not intend to surrender its relationship with Beijing.
The Kingdom’s strategy appears to be one of strategic diversification: obtain advanced military and security capabilities from Washington while retaining economic, diplomatic and technological options with Beijing.
That approach inevitably creates friction because Washington increasingly views Chinese technology and strategic infrastructure through a national-security lens.
The unanswered question
The most interesting question is therefore not:
“Did Saudi Arabia leave mBridge because America told it to?”
There is currently insufficient public evidence to answer that affirmatively.
The more useful question is:
“Did Saudi Arabia calculate that remaining publicly involved in a China-led payment system carried greater geopolitical costs than benefits at a time when its security relationship with Washington was becoming increasingly important?”
That remains a plausible interpretation, but it is an interpretation rather than an established fact.
The Financial Times reporting supports the existence of US sensitivity and Saudi caution, but it does not establish a direct quid pro quo involving American military support against the Houthis.
Conclusion
Saudi Arabia’s departure from mBridge is best understood as one piece of a much larger strategic picture.
Riyadh has not abandoned China.
Nor has it abandoned its reliance on the United States.
Instead, the Kingdom appears to be managing an increasingly difficult triangle between Washington’s security architecture, Beijing’s economic and diplomatic influence, and Saudi Arabia’s own ambition for strategic autonomy.
The Houthi conflict makes that balancing act more urgent.
Saudi Arabia needs American military capabilities and political support while simultaneously recognising that China possesses diplomatic and economic leverage in the region — including channels to Iran that Riyadh itself has recently sought to activate.
The mBridge withdrawal may therefore prove politically significant even if it was, as SAMA maintains, the planned conclusion of a technical experiment.
Its significance lies not necessarily in Saudi Arabia choosing America over China, but in the possibility that Riyadh is drawing clearer boundaries around which forms of cooperation with Beijing it is prepared to pursue while its security relationship with Washington becomes increasingly important.
For now, the evidence supports strategic caution rather than a confirmed Saudi-American bargain.
And that distinction is crucial.
The Kingdom’s policy is not necessarily about choosing between Beijing and Washington.
It may be about ensuring that neither power becomes indispensable.
