China is set to establish an international operations centre for its digital yuan in Shanghai, part of a broader strategy to internationalise the currency. Pan Gongsheng, governor of the People’s Bank of China, made the announcement on Wednesday.
According to Hong Kong’s public broadcaster RTHK, Pan outlined the plan at Shanghai’s high-profile Lujiazui Forum, a gathering of local and foreign representatives from the finance industry.
He said the move reflected China’s long-term ambition to promote a multi-polar global currency system – implying a reduction in the world’s reliance on the US dollar.
Pan also highlighted the vulnerabilities of the current global payment system, saying it could be too easily “politicised and weaponised and used as a tool for unilateral sanctions, damaging global economic and financial order.”
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Pan argued that a multipolar international monetary system would not only reduce the dominance of any single currency but also enhance global financial resilience and improve checks on sovereign monetary policy.
The governor spoke of the yuan’s rising status in recent years, noting that the Chinese currency now ranked as the world’s second most-used currency in trade finance and the third in international payments.
Regarding the new international operations centre for its digital yuan in Shanghai, Pan said a range of “pioneering innovative structural monetary policy tools” would be trialled in the city – including blockchain-based credit refinancing in the aviation and shipping sectors, cross-border trade refinancing mechanisms, the expansion carbon emission reduction tools and risk-sharing mechanisms in tech innovation bonds to support private equity issuance.
In addition, the authorities planned to set up a trade reporting repository in Shanghai to capture and analyse high-frequency interbank market data, strengthening regulatory insight across financial markets.
