Digital Yuan: China Accelerates Its International Deployment

The People’s Bank of China (PBOC) has just inaugurated an international center dedicated to the digital yuan in Shanghai. A strong signal: Beijing wants to impose its e-CNY as a pivot of a new global monetary order. Can this initiative really challenge the dollar’s hegemony and compete with stablecoins dominated by the greenback?

An operations center in Shanghai, the new showcase for the digital yuan

On Thursday, the People’s Bank of China inaugurated its International Operations Center for the digital yuan (e-CNY) in Shanghai. The announcement was made by Lu Lei, PBOC Deputy Governor, who describes this decision as a “historical inevitability” in the evolution of payments. 

The goal is clear: to establish a robust infrastructure capable of smoothing settlements and laying the groundwork for an international integration of CBDCs.

China has been working on its CBDC project since 2014. But this new phase marks an acceleration. It comes in a context where Beijing wants to reduce its dependence on the US dollar, especially for international transactions. 

As Governor Pan Gongsheng reminded in June at the Lujiazui Forum, the ambition is to create a “multipolar” monetary system, where several currencies could coexist and support global growth.

Beyond financial innovation, this center carries a strong geopolitical dimension. Traditional cross-border payment infrastructures, such as SWIFT, are perceived by Beijing as vulnerable and easily instrumentalized in the context of economic sanctions. 

By developing its own network, China intends to consolidate its monetary sovereignty and protect itself against possible external pressures.

CBDC vs stablecoins, a duel for the future of payments

The opening of the Shanghai center comes as China slows down its real asset tokenization projects in Hong Kong. Beijing therefore seems to prioritize the development of the digital yuan over that of RWAs.

This choice comes in an international context marked by the rise of dollar-backed stablecoins. These already facilitate global transactions and represent more than 98% of a market estimated at 288 billion dollars. 

Faced with this hegemony, China wants to reverse the trend by promoting global use of the digital yuan. According to Reuters, it might even authorize the issuance of yuan-denominated stablecoins, a major strategic U-turn after years of mistrust toward cryptos.

The competition looks direct: on one side, market-dominated stablecoins widely adopted by the crypto ecosystem; on the other, CBDCs tightly controlled by central banks. 

Beijing bets on its economic power and its network of trade alliances to impose the e-CNY, particularly among BRICS countries and the Shanghai Cooperation Organization.

With this operations center, China clearly advances its pieces in the global monetary battle. Its goal is twofold: to position the digital yuan as a credible alternative to the dollar and to limit the influence of stablecoins dominated by the United States. An ambitious bet that could reshape the international financial balance in the next decade.