China is accelerating efforts to promote the digital yuan as a global currency, with the People’s Bank of China (PBoC) unveiling plans for a new international operations center for its central bank digital currency (CBDC) in Shanghai. The move signals Beijing’s broader strategy to counter U.S. dollar dominance in global finance.
Speaking at the Lujiazui Forum, PBoC Governor Pan Gongsheng outlined the vision for a more “multipolar” financial world—one in which monetary power is no longer centered on the dollar or euro. The launch of the international e-CNY hub in Shanghai represents a concrete step toward expanding the digital yuan beyond domestic retail payments to international trade and remittances.
Pan also warned that traditional payment infrastructure can be weaponized for geopolitical leverage. “Traditional cross-border payment infrastructures can be politicized and weaponized,” he said, citing SWIFT’s role in enforcing U.S. sanctions. The underlying message: a sovereign digital currency like the e-CNY could provide a more independent and secure payment system.
China Advances Amid Global CBDC Development Race
The Shanghai CBDC center comes as part of China’s broader effort to stay ahead in the global competition over central bank digital currencies. While the U.S. continues to debate a digital dollar, China is moving from pilot programs to implementation, with ongoing e-CNY trials across payroll systems, local retail use, and public disbursements.
This new international hub may also coordinate cross-border CBDC usage with trade partners, particularly through initiatives like the mBridge project—a multinational CBDC collaboration with the Bank for International Settlements and several central banks in the Middle East and Asia.
China’s timing aligns with growing discontent among global markets over the weaponization of the dollar. In 2025, increased tariffs and unilateral sanctions by the Trump administration have rattled investor confidence in the greenback. As a result, emerging economies may begin to view the digital yuan as a viable alternative for trade and reserve holdings.
CBDCs and Stablecoins in a Currency Power Clash
While dollar-pegged stablecoins have become essential tools for cross-border payments, state-backed CBDCs are entering the arena with increased urgency. Stablecoins offer decentralized access and fast settlement, but their private issuance often places them outside formal monetary systems.
Governments worldwide are ramping up CBDC development. Hong Kong, the EU, and the UAE have all launched trials or announced plans, with Israel and India exploring digital versions of the shekel and rupee, respectively. China, a pioneer since 2014, continues to lead in real-world application.
Still, global momentum is mixed. A February survey by the Official Monetary and Financial Institutions Forum found that nearly one-third of central banks have paused their CBDC programs due to regulatory and economic concerns. Despite this, geopolitical stakes remain high. China views the e-CNY as a hedge against U.S. sanctions and dollar-centric trade, while U.S. policymakers increasingly look to dollar-backed stablecoins to extend American monetary dominance in digital finance.
Quick Facts
- China launched an international CBDC hub for the digital yuan in Shanghai.
- PBoC sees the e-CNY as a hedge against U.S. financial control.
- Global CBDC efforts face delays, but geopolitical pressure is rising.
- Stablecoins and sovereign tokens now compete for currency dominance.
