China’s central bank is looking to expand the international use of the digital yuan with the ultimate aim of developing a multi polar global currency system where multiple currencies dominate the world economy.
According to People’s Bank of China Governor Pan Gongsheng, China intends to establish an international operation centre for e-CNY in Shanghai. He made the announcement Wednesday at the Lujiazui Forum, a high-profile event for financial executives and regulators.
The move reflects China’s renewed push to promote the yuan globally. Investors are increasingly seeking alternatives to dollar-based assets amid rising U.S. tariffs. In addition, international trade tensions have created fresh interest in diversifying currency holdings.
China is also accelerating its efforts to build financial systems that operate independently of Western institutions. Further, shifting trade routes and geopolitical changes are driving this transition. These developments highlight China’s broader strategy to reshape the global economic order on its own terms.
“Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability,” Pan said.
Such a system would allow regional currencies to gain influence, reducing global dependence on the U.S. dollar.
Pan expects several major currencies to coexist in competitive balance, each acting as a check on the others. In addition, Washington’s aggressive and erratic tariff policies have undermined confidence in the dollar and other U.S. assets.
As a result, investors are shifting toward Asian currencies and the euro. Also, growing interest in cryptocurrencies—especially stablecoins—reflects this broader pivot. These digital assets, backed by real-world assets, offer price stability and an alternative to traditional fiat currencies.
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Massive privacy and human rights concerns with CBDC
The digital yuan, or e-CNY, is China’s central bank digital currency (CBDC), issued by the People’s Bank of China. Officials launched pilot programs in 2020, initially testing the currency in major cities like Shenzhen and Suzhou.
The e-CNY aims to modernize payments, reduce reliance on cash, and challenge the dominance of private payment platforms. Basically, it gives the central bank direct control over digital money flows allowing for more targeted monetary policy.
Conversely, critics warn that the digital yuan could enhance state surveillance. It allows authorities to track transactions in real time and potentially restrict how individuals spend. Furthermore, analysts argue it may give the government new tools for financial control and censorship.
Privacy advocates express concern that the e-CNY lacks the anonymity found in cash or even in some digital wallets. Despite technical safeguards, public trust remains a challenge for broader adoption inside and outside China.
There’s also the consideration that the digital yuan could integrate with China’s social credit system. This would enable authorities to reward or penalize behaviour through financial access. In addition, it may allow real-time enforcement of restrictions, such as limiting travel or purchases. Critics argue this deepens state control over individual freedoms and financial autonomy.
China has long aimed to make the yuan a global currency, similar to the dollar or euro. This ambition reflects its status as the world’s second-largest economy.
However, China’s refusal to fully open its capital account has slowed progress. Meanwhile, Beijing has made gains in other areas, especially with partners like Russia.
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China continues to push global yuan adoption
Beyond cryptocurrency, however, growing trade ties have helped expand the yuan’s reach in cross-border transactions. On Wednesday, six foreign banks—including Standard Bank and First Abu Dhabi Bank—agreed to adopt China’s Cross-Border Interbank Payment System (CIPS).
State broadcaster CCTV reported the deal as a step toward wider use of the yuan in international trade. Furthermore, CIPS offers a yuan-based alternative to SWIFT, reducing reliance on dollar-dominated systems.
While full capital liberalization remains off the table, China continues to push global yuan adoption through alternative mechanisms and strategic alliances.
Pan said digital technologies have revealed key weaknesses in traditional cross-border payment systems, which remain inefficient and prone to geopolitical risks. He noted that older infrastructures are vulnerable to politicization and can be weaponized through unilateral sanctions, disrupting global financial stability.
At the forum, China’s foreign exchange regulator pledged to maintain a stable yuan exchange rate and guard against external shocks. Zhu Hexin, head of the State Administration of Foreign Exchange, added that China has strengthened its ability to manage forex market volatility.
Li Yunze, director of the National Financial Regulatory Administration, emphasized that Beijing will continue opening its financial sector to global players. He stated that foreign institutions serve as critical channels for attracting capital and talent. Therefore, their role is vital to building a modern, competitive Chinese financial system.
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