Saudi Arabia’s CBDC Threatens US Dollar Hegemony: Is It Really Over?
The world is watching as Saudi Arabia, a major oil producer, gradually moves away from the US dollar. This shift, fueled by the development of their own central bank digital currency (CBDC), mBRIDGE, has some experts questioning the future of the US dollar’s dominance.
The Trade-Offs of a Changing World
The situation in Saudi Arabia highlights the inherent trade-offs in global economics. As countries seek new paths, the US faces a challenge to its long-held financial power.
- The rise of CBDCs, especially China’s mBridge, is creating alternative systems for global payments, potentially reducing reliance on the US dollar.
- Saudi Arabia’s move toward mBRIDGE is a significant step, as it is a major oil exporter and a key player in global energy markets.
The Rise of mBridge
China’s CBDC, mBridge, is gaining traction globally. The project, designed for cross-border payments, is increasing yuan settlements, challenging the dollar’s supremacy.
- Yuan settlements have risen from 18% to nearly 30% by early 2024, and international trade using the yuan reached a peak of 4.7% in March 2024.
- China’s success with mBridge could be a factor in its reluctance to fully embrace Bitcoin, as it already has its own CBDC and international payment system.
While the US dollar’s dominance is being tested, it is too early to declare its demise. The world’s financial system is complex, and the future remains uncertain. However, the rise of CBDCs, particularly mBRIDGE, is a significant development to watch as it could reshape the global financial landscape.
