A large international money transfer worth 1.7 billion dollars was completed in just one hour through China's payment network.
According to the South China Morning Post on July 24, the Bank of China processed a remittance of 1.7 billion dollars (approximately 2.5 trillion won) through its Shenzhen branch using mBridge, the international payment platform of the People's Bank of China. This month, a larger amount was reported to have been transferred to the Bank of China's Fujian branch from overseas. The July transaction was the largest in terms of value among those using mBridge.
The June transaction involved a Chinese corporate client sending money to an overseas corporate client, while the July transfer was made by an overseas remitter to a corporate account in mainland China. The transfer took less than 60 minutes to complete.
China launched mBridge, a digital payment platform based on blockchain technology, in 2021. A key feature of mBridge is that it does not go through the international payment network SWIFT. Central banks from various countries join mBridge to settle transactions using central bank digital currencies, allowing financial institutions to conduct cross-border remittances.
This system differs from the Cross-Border Interbank Payment System (CIPS), which China established in 2015 to facilitate international transactions in yuan. CIPS uses existing banking payment systems for international yuan payments and settlements and also utilizes the SWIFT system.
Market analysts view mBridge as a crucial tool for China to reduce geopolitical risks and decrease reliance on the dollar-centric international payment network. A recent report from the Japan Research Institute described mBridge as a project designed to establish a mechanism for continuing yuan-denominated payments amid rising geopolitical tensions and economic sanctions.
French investment bank Natixis stated, "As the use cases for mBridge increase, the platform's maturity will grow, and in the long term, it could establish itself as an alternative payment network to SWIFT while supporting the internationalization of the yuan."
* This article has been translated by AI.
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