In recent weeks, the BRICS summit in Kazan grabbed headlines worldwide as emerging economies looked for ways to reshape global power. Yet, as all eyes were on Russia, something even more significant was happening across the world in Washington, D.C. At the quiet annual meetings of the International Monetary Fund (IMF) and World Bank, a hidden decision may have been made—one that could shake up the global financial system even more than anything discussed at the BRICS summit.
At the center of this potential shift is mBridge, a new pilot program sponsored by the Bank for International Settlements (BIS), sometimes called “the central bank for central banks.” mBridge allows countries to trade with each other directly, using their own digital currencies, called CBDCs (central bank digital currencies). This means countries wouldn’t have to use the US dollar for international transactions, nor would they rely on the current SWIFT system, the global financial messaging network that the US can monitor. In theory, transactions on mBridge could be nearly invisible to US authorities—a radical change from today’s system.
The US is concerned. Why? mBridge could reduce the US dollar’s dominance in global trade, weakening America’s financial influence. Even more unsettling for Washington, China has had a significant role in mBridge’s technology. This includes blockchain systems, which make transactions secure and difficult to trace. To many, it’s surprising that the BIS would allow such a project, especially given its history of favoring Western financial policies and priorities. So, why did it?
One theory is that Western powers, including the US, wanted to understand mBridge from the inside before deciding whether to shut it down. If you’ve followed the US’s strong stance on Huawei and 5G technology, this might sound familiar. The US has blocked Chinese 5G equipment in many countries, arguing it could be used for espionage. But some believe the US’s real fear is losing control over global data flows. Now, Washington seems to view mBridge with the same suspicion, fearing it could make the US financial system more vulnerable.
Leaders from the BIS and the US State Department haven’t exactly hidden their distrust of mBridge. Agustin Carstens, the outgoing BIS general manager, made it clear: “We cannot support any project for BRICS because we cannot work with countries under sanctions.” The US often imposes sanctions as a way to influence global affairs. But Carstens’ statement shows these sanctions extend to global financial projects like mBridge, restricting who can participate and highlighting the BIS’s Western influence.
Vedant Patel, a US State Department spokesman, was even more blunt. He warned that mBridge and any alternative to SWIFT threaten democracy itself. He claimed such systems support “authoritarian regimes” and undermine “democratic values.” The message here is that any system not based on the US dollar is a danger to democracy—at least, according to the US.
But the issue is more complicated. To many, mBridge represents a chance to create a fairer financial system that isn’t centered on a single country’s currency. Countries like China, Hong Kong, Thailand, and the United Arab Emirates already use mBridge to trade directly with each other, bypassing the US dollar and even the BIS itself. While it might take time for more countries to join, mBridge shows that the world is exploring ways to trade that don’t rely on the US.
The US dollar has ruled global trade for decades, and American banks and policymakers have benefited greatly. But for some countries, the dollar’s dominance feels like a form of control. The US can impose sanctions that cut countries off from the global economy. A system like mBridge could loosen America’s grip on the financial system and give other nations a bit more freedom.
The truth is, even if the BIS decides to shut down mBridge, the idea it represents is likely here to stay. Countries frustrated with the US’s power over international finance may continue to search for new ways to trade independently. The more the US relies on financial dominance to steer global politics, the more likely it is that alternatives like mBridge will keep popping up.
mBridge is more than just a new payment platform. It’s a signal that the global financial system may be on the verge of change, with new networks and new rules that could eventually challenge the dollar’s dominance. Whether or not mBridge survives, it’s a glimpse into a future where the balance of power in global finance may look very different.
