China reportedly links central bank digital currency (CBDC) transactions to over ten ASEAN and six Middle Eastern countries, sparking speculation and concern about potential data privacy issues.

China reportedly links central bank digital currency (CBDC) transactions to over ten ASEAN and six Middle Eastern countries, sparking speculation and concern about potential data privacy issues.

In the realm of international finance, China is making significant strides in its digital RMB cross-border payment systems, particularly with countries in the Association of Southeast Asian Nations (ASEAN).

A large proportion of trade within ASEAN is currently denominated in RMB, reflecting the widespread regional use of Chinese currency for trade settlements. This trend is a testament to the deepening digital and RMB payment integration between ASEAN and China.

At the 42nd ASEAN Summit in May 2023, ASEAN leaders agreed on advancing regional payment cooperation and promoting local currency transactions. This includes interoperable QR code systems for digital payments across ASEAN countries, which supports cross-border digital RMB payments in practice.

Chinese banks and infrastructure are also playing a crucial role in this advancement. Bangkok Bank, for example, is a direct participant in China’s Cross-border Interbank Payment System (CIPS), which facilitates faster renminbi international transactions, reducing transaction time.

The growth of digital RMB cross-border payments is not limited to ASEAN. By mid-2025, digital yuan transactions exceeded $34 billion, with pilot programs ongoing in multiple major cities. This indicates a growing adoption of the digital yuan beyond ASEAN, although there is no specific public announcement confirming linkage to six Middle Eastern jurisdictions as of mid-2025.

However, it's important to note that China has not specifically announced that its digital RMB cross-border payment system is linked to exactly ten ASEAN countries and six Middle Eastern jurisdictions. The available information emphasizes scaling within ASEAN and expanding digital yuan pilots worldwide.

In the meantime, mBridge, a cross-border payments solution, launched as a minimum viable product in June 2024. Initially, mBridge had a few dozen observers, including five ASEAN countries and six Middle Eastern ones. However, as of November 2024, there was only one ASEAN mBridge member, Thailand, and five ASEAN observers. There were two Middle Eastern members and four Middle Eastern observers.

If observers are counted, mBridge would cover about 38% of global trade by bypassing the US dollar-dominated SWIFT network. But it's worth mentioning that the cost of choosing a trading currency other than dollars falls on merchants, who usually want to save money.

There has been speculation about the involvement of a sanctioned country in mBridge, leading to rumours of the Bank for International Settlements (BIS) considering withdrawing from the project. However, BIS General Manager Agustín Carstens mentioned that the BIS could not be involved with sanctioned countries, and that mBridge was never designed to cater to BRICS.

In conclusion, while China is making significant strides in advancing its digital RMB cross-border payment systems, particularly with ASEAN countries, the specific linkage to ten ASEAN countries plus six Middle Eastern jurisdictions remains unclear. The focus seems to be on scaling within ASEAN and expanding digital yuan pilots globally. Meanwhile, mBridge, a cross-border payments solution, is making progress but is not yet at the 38% coverage level required to bypass the US dollar-dominated SWIFT network.

1. The news about China's digital RMB cross-border payment system has sparked insights into the future of international finance, as China progresses with its digital currency initiatives, particularly in relation to ASEAN countries.
2. Stablecoins like the digital RMB are becoming increasingly significant within the industry, as their use for trade settlements has grown, such as in the increasing number of RMB transactions within ASEAN.
3. The government's role in advancing digital currency payment systems is evident, as demonstrated by ASEAN leaders' agreement to promote local currency transactions and regional payment cooperation, including the use of interoperable QR code systems for digital payments.
4. The business of finance is undergoing transformative shifts with the emergence of technology like mBridge, a cross-border payments solution, which aims to bypass the US dollar-dominated SWIFT network and potentially include countries that may not traditionally be part of international financial systems.

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