The geopolitical world is becoming multipolar. Inevitably, the international monetary system is also evolving towards one where several sovereign currencies coexist and compete with each other.
As the second-largest economy, China must broaden the international role and appeal of the yuan. To this end, it makes sense to set up a new operations centre in Shanghai, the key mainland financial hub, to boost the yuan’s global reach.
As announced at the just-concluded Lujiazui Forum in the city, the international operations centre will pilot a range of monetary policy tools to complement the rolling out of the digital renminbi.
The strategy underscores Beijing’s determination to promote the use of the e-CNY, a central bank digital currency (CBDC), on a worldwide scale.
At a time when most countries are still grappling with the concept of a CBDC, China is moving full steam ahead. Successful trials in the retail use of e-CNY have been carried out across a dozen Chinese cities since 2023, and in Hong Kong since last year.
A promising cross-border payments and banking system called “mBridge” is linking the CBDCs from the central banks of China, Hong Kong, the UAE, Saudi Arabia and Thailand.
