The People’s Bank of China (PBOC) called for reducing global dependence on the U.S. dollar and establishing a multipolar global currency system, with the digital yuan (e-CNY) as its potential basis.
Pan Gongsheng, Governor of the People’s Bank of China, announced plans to expand the international use of the digital yuan (CBDC) and establish an international operations center in Shanghai. He emphasized the need to transition to a multipolar currency system where several national currencies play key roles, reducing U.S. dollar dominance and strengthening global financial stability, according to Reuters.
China’s call for reforming the global currency system comes amid growing tensions in global trade caused by U.S. tariff policies and increasing investor interest in alternatives to the dollar. “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,” stated the PBOC governor.
Pan also noted that traditional cross-border payment systems are vulnerable to geopolitical risks, may be politicized, and used as tools for unilateral sanctions. In this context, e-CNY is viewed as a strategic tool for building an independent global financial infrastructure.
As part of expanding the international use of China’s national currency, a recent agreement was signed between six foreign banks, including Standard Bank and First Abu Dhabi Bank, and the People’s Bank of China. Under the agreement, these financial conglomerates will use China’s Cross-Border Interbank Payment System (CIPS) for yuan-denominated settlements. The initiative aims to strengthen the yuan’s role as a financial instrument for international payments.
Chinese financial regulators also reaffirmed their commitment to maintaining yuan exchange rate stability. Zhu Hexin, Head of the State Administration of Foreign Exchange, stated that China’s capabilities to stabilize the currency market have significantly increased. Li Yunze, Director of the National Financial Regulatory Administration, emphasized that the country will continue opening its financial markets to foreign participants, creating a transparent and predictable environment, and expanding access to various financial segments.
e-CNY is the most widely used CBDC worldwide. It’s actively employed for securities trading, cross-border trade, global gold purchases, offline payments, and much more.
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