Digital Yuan Set for Global Push as China Challenges US Dollar’s Reserve Currency Status

Pan Gongsheng, China’s central bank chief, has reaffirmed the country’s commitment to expanding the digital yuan’s global presence, outlining an ambitious vision for the future of its central bank digital currency (CBDC), known as e-CNY.

Speaking at the Lujiazui Forum—a premier gathering of domestic and international financial leaders—Pan announced plans to establish an international operations hub for the digital yuan in Shanghai.

At the heart of China’s strategy is the push for a “multipolar” currency system—one in which multiple national currencies share the responsibilities of supporting global trade and finance.

This approach stands in sharp contrast to the current system, dominated by the US dollar and the euro.

Pan suggested that recent developments, including unpredictable tariff policies under President Donald Trump, have eroded investor confidence in the dollar's long-term reliability.

He also emphasized the growing importance of digital technologies in reshaping global finance, arguing that traditional cross-border payment systems are increasingly exposed to geopolitical risks.

He noted:

“Traditional cross-border payment infrastructures can be easily politicized and weaponized, and used as a tool for unilateral sanctions, damaging global economic and financial order."

The Race Between Stablecoins and CBDCs to Dominate Global Payments

Stablecoins—typically pegged to the US dollar—have emerged as one of the most practical and widely adopted applications of cryptocurrency, particularly for cross-border payments.

Their decentralised design and ease of transfer stand in contrast to CBDCs, which are state-issued and centrally managed.

While stablecoins continue to gain traction globally, many governments are forging ahead with their own CBDC initiatives, each with distinct strategic and regulatory goals.

Hong Kong is currently piloting a stablecoin programme, positioning itself as a digital asset hub within Asia.

In Europe, momentum continues to build around the digital euro, backed by policymakers across the EU.

The United Arab Emirates is also advancing quickly, aiming to launch the digital dirham by the end of 2025, while Israel has unveiled a preliminary blueprint for its proposed digital shekel.

Yet enthusiasm around CBDCs is not uniform.

A 11 February report from the Official Monetary and Financial Institutions Forum (OMFIF) noted that 31% of central banks surveyed are delaying rollout plans due to regulatory uncertainty and evolving macroeconomic conditions.

Despite this slowdown, China remains a clear outlier.

Having initiated its CBDC research as early as 2014, Beijing is pushing forward with efforts to expand the digital yuan both at home and abroad.

These efforts are part of a broader strategy to reduce reliance on the US dollar—a currency it has long sought to challenge, particularly since trade tensions escalated during the Trump administration’s tariff campaign.