China’s central bank says to promote digital yuan, multi-polar currency system

[SHANGHAI] China’s central bank governor announced plans to promote the international use of the digital yuan and called for the development of a multi-polar global currency system, where several currencies dominate the world economy.

China will establish an international operation centre for e-CNY in Shanghai, People’s Bank of China Pan Gongsheng said on Wednesday (Jun 18) at the Lujiazui Forum, a gathering of financial industry executives and regulators.

Policymakers will also advance plans to launch yuan futures trading in the city, he said, to provide a new risk-hedging tool for investors.

“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 said. Such a system would pave the way for some currencies to hold sway in their respective regions, lessening reliance on the US dollar.

He expects several key global currencies to coexist in mutual competition and checks and balances.

Pan’s call comes as US President Donald Trump’s erratic tariff and foreign policies have dented investor trust in US dollar assets.

It also comes amid rising global interest in cryptocurrencies, including stablecoins – a type of cryptocurrency that is backed by an asset and holds a stable price.

Pan said that digital technologies have exposed weakness in traditional cross-border payment systems, which are less efficient, and vulnerable to geopolitical risks.

“Traditional cross-border payment infrastructures can be easily politicised and weaponised, and used as a tool for unilateral sanctions, damaging global economic and financial order,” Pan said. REUTERS