As China moves to accelerate global use of the digital yuan, particularly in cross-border trade along Belt and Road Initiative countries, the push is being interpreted as part of Beijing’s broader ambition to rewire the architecture of global finance.
With international finance increasingly fragmented amid trade wars and sanctions, Chinese officials argue that dollar-based systems backed by the Society for Worldwide Interbank Financial Telecommunication (Swift) are vulnerable to “weaponisation”.
China’s plan to push its central bank-backed digital currency, also known as e-CNY, comes amid receding Western influence in some parts of the Global South and signals Beijing’s focus on nurturing economic ties and a more ideologically neutral, tech-enabled financial order.
Chinese officials have begun to discuss the e-CNY in strategic terms. Last month, People’s Bank of China Governor Pan Gongsheng called for a “multipolar” monetary system and announced plans for an international e-CNY operations centre in Shanghai. This comes as US tariffs fuel interest in non-dollar assets and a more internationalised yuan.
Beijing has signed digital currency agreements with central banks and begun cross-border experiments with state-run banks in other countries. Increasingly, the e-CNY is being seen as a foreign policy tool to re-establish trade on Chinese digital infrastructure.
Much of China’s strategy builds from a profound dissatisfaction with the Swift-supported dollar system: Russia’s exclusion from Swift in 2022 resulted in many countries seeking alternatives. China’s twofold solution is to build its own payment rails – launching the Cross-border Interbank Payment System (CIPS) in 2015 – and offer its central bank digital currency (CBDC).
