Saudi Arabia has decided to participate in a cross-border central bank digital currency (CBDC) pilot led by China, potentially marking another step toward reducing the use of the U.S. dollar in global oil commerce.

The announcement came Wednesday from the Bank for International Settlements (BIS), which stated that the Saudi central bank is now a “full participant” in the mBridge Project, launched in 2021 alongside the central banks of China, Hong Kong, Thailand, and the UAE. 

The BIS also reported that mBridge has reached the “minimum viable product” stage, moving from prototype to a functional system.

Currently, around 135 countries and monetary unions, representing 98% of global GDP, are exploring central bank digital currencies (CBDCs). However, technical and political challenges continue to complicate cross-border adoption. 

Russia says "BRICS must be prepared for the collapse of the dollar." pic.twitter.com/QvkzsZJ1c5

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Josh Lipsky, director of a global CBDC tracker, said: “The most advanced cross-border CBDC project has just added a major G20 economy and the world’s largest oil exporter.”

This is expected to expand commodity settlements beyond the U.S. dollar next year—something already underway between China and Saudi Arabia, now enhanced by new technology. 

What is mBridge about?

mBridge can use the code behind China’s digital yuan and is accessible to 26 observer members, including the New York Fed, IMF, and European Central Bank. The platform is also compatible with the Ethereum Virtual Machine, the software backbone of the cryptocurrency Ether, making it a testbed for future applications. 

CBDC advocates argue these currencies will modernize payments and offer an alternative to physical cash, though questions remain about adoption and potential government surveillance risks. China leads the world’s largest national CBDC pilot, now covering 260 million people and 200 payment scenarios.

Other emerging economies, including India, Brazil, and Russia, plan to launch digital currencies within the next 1–2 years, while the U.S. remains politically resistant to a “digital dollar.”