Beijing Advocates for Multipolar Monetary Order
China is intensifying its efforts to reshape the global financial system by championing a multipolar international currency structure and expanding the reach of its digital currency, the e-CNY. In remarks delivered at the Lujiazui Forum in Shanghai, People’s Bank of China (PBOC) Governor Pan Gongsheng emphasized the need for a global currency system that does not rely solely on the U.S. dollar.
According to Pan, such a system would improve checks and balances in global finance, reduce vulnerabilities, and promote overall economic resilience. He argued that the dominance of a single sovereign currency—like the U.S. dollar—creates systemic risks and can be exploited for geopolitical leverage.
“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,” Pan stated.
This sentiment reflects growing dissatisfaction among global investors, particularly in the wake of U.S. tariffs and sanctions that have prompted a reevaluation of dollar-based investments.
Strategic Expansion of the Digital Yuan
In a key development, Pan announced that China will set up an international operations center for the digital yuan (e-CNY) in Shanghai, underscoring the country's ambition to turn its digital currency into a global financial tool.
While China has yet to fully liberalize its capital account—one of the main hurdles preventing the yuan from becoming a true peer to the dollar or euro—the country is making significant progress in expanding the yuan’s international presence. Its digital currency initiative is viewed as a way to leapfrog traditional financial barriers.
Digital technologies, Pan said, reveal the inefficiencies and political vulnerabilities in existing cross-border payment systems. He warned that traditional infrastructure can be "politicized and weaponized," leading to unilateral sanctions and disruptions in global finance—something China aims to circumvent through the e-CNY and yuan-based alternatives.
CIPS Gaining Traction Among Global Banks
Momentum behind China's yuan-based financial infrastructure is gaining ground. State broadcaster CCTV reported that six foreign banks, including South Africa’s Standard Bank and the UAE’s First Abu Dhabi Bank, have agreed to adopt the Cross-Border Interbank Payment System (CIPS). This system is designed to facilitate international trade settlements in yuan, offering an alternative to the SWIFT network and reinforcing China’s financial sovereignty.
The CIPS expansion is viewed as a critical step in aligning global financial flows with the yuan, especially among countries looking to reduce their reliance on U.S.-controlled financial systems.
Yuan Stability and Market Openness Remain Policy Priorities
Alongside efforts to globalize the yuan, Chinese officials reassured market participants that they are committed to maintaining the currency’s stability. Zhu Hexin, head of the State Administration of Foreign Exchange, said that China’s capacity to manage foreign exchange volatility has improved significantly, providing a buffer against external shocks.
China also signaled a broader willingness to welcome foreign financial institutions. Li Yunze, director of the National Financial Regulatory Administration, outlined Beijing’s intent to further open its financial sector, enhance transparency, and create a more predictable investment climate.
“Foreign institutions are important bridges and links for attracting investment and talent,” Li said. “They are active contributors to the construction of China’s modern financial system.”
Li also highlighted the potential of China’s vast and growing consumer market as a major draw for international firms seeking growth opportunities.
Rebalancing Global Financial Influence
China’s renewed push to internationalize the yuan is emerging at a time when confidence in the U.S. dollar is under pressure—not just from shifting trade dynamics but also from the rise of alternative digital assets like cryptocurrencies and stablecoins. As global investors diversify their portfolios, Beijing appears poised to offer a more prominent role for the yuan in international transactions and reserves.
Although long-standing structural challenges remain, China's steady moves—ranging from digital currency adoption to institutional reforms—are laying the groundwork for a financial system that reflects a more multipolar world.