China to expand digital yuan globally and develop a multi-polar global currency system

The head of China’s central bank has sworn to expand the international use of the digital yuan. He also called for the development of a multi-polar global currency system, in which more than one currency rules the world economy.

People’s Bank of China Governor Pan Gongsheng said at the Lujiazui Forum on Wednesday that China will set up an international operation center for the digital yuan (e-CNY)in Shanghai. The Forum is a high-profile event for financial industry executives and regulators from around the world. This reaffirms the country’s central bank digital currency (CBDC) vision.

On the other hand, the US and China’s competition has fully settled with crypto instead of CBDCs. The country has made a bold move with the ongoing bill: The Genius Act, which is meant to regulate stablecoins. 

In addition, many countries continue to pursue CBDCs. In Europe, lawmakers across member states continue to push for a digital euro, while the United Arab Emirates expects to roll out the digital dirham by the end of 2025. Israel has also released a preliminary design for a digital shekel.

China accelerates building financial systems independent of Western institutions

China’s “multipolar” currency system vision contrasts with the current system, where a few currencies, like the US dollar and the euro, play large roles in the global financial system.

Pan Gongsheng said that traditional cross-border payment systems are vulnerable to geopolitical risk. “Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability,” he said.

China is accelerating efforts to develop financial systems independent of Western institutions. This has always been China’s goal, together with the BRICS ecosystem. 

However, the goal has been slowed down by an unwillingness to open the capital account. That isn’t likely to change any time soon, but progress is expected to speed up in other areas, where it has already made gains in Russia and other trade partners.

On the other hand, the US dollar seems to have become less appealing to investors in 2025, partly due to the unscripted rollout of tariffs by US President Donald Trump over the past months. As a result, investors are moving their money away from the US dollar and toward Asian currencies and the euro.

It’s also happening at the same time that people around the world are becoming more interested in cryptocurrencies.

China wins over foreign investors

The head of China’s foreign exchange regulator promised to protect the yuan exchange rate from external risks and shocks at the meeting. Zhu Hexin, head of the State Administration of Foreign Exchange, said that China is better able to handle changes in the foreign exchange market.

Li Yunze, who is in charge of the National Financial Regulatory Administration, told the gathering that Beijing will also make its financial market even more open to foreign investors.

“Foreign institutions are important bridges and links for attracting investment, talent, and are important participants and active contributors to the construction of China’s modern financial system,” Li said.

Li Yunze also said that China would make the business situation clear, stable, and predictable for foreign companies. They would also look into ways to open up more financial areas. He added that foreign institutions would have more chances to do business in China because its consumer market has grown quickly.

Six foreign banks, including Standard Bank and First Abu Dhabi Bank, have agreed to use China’s Cross-Border Interbank Payment System (CIPS), an international settlement system based on the yuan, in the future. 

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