China to establish global operations center for digital yuan

BEIJING

China will establish an international operations center for the digital yuan, the central bank announced this week, in a move aimed at enhancing the currency’s global utility and reducing reliance on dominant international currencies.

Speaking at the Lujiazui Forum in Shanghai, Pan Gongsheng, governor of the People’s Bank of China (PBoC), said the initiative is part of broader efforts to internationalize the digital yuan, also known as the e-CNY.

Pan said structural problems in traditional cross-border payment systems have become increasingly apparent, highlighting the need to diversify and modernize global financial infrastructure.

“There is a growing need to reduce dependence on a single currency,” he said, without directly naming the US dollar.

Pan also criticized the current governance structures of major international financial institutions, including the International Monetary Fund and the World Bank, noting that voting rights and share allocations have not kept pace with global economic shifts.

“A regulatory adjustment is necessary for emerging markets and developing countries to take their rightful place in the global economy,” he said.

Digital yuan development

China began developing the digital yuan in 2014. It was launched in 2020 with a pilot program across four cities and has since expanded.

In 2022, the PBoC rolled out a mobile app that functions as a digital wallet for the e-CNY. The app, available on the App Store and Google Play, allows users to make transactions with the digital currency.

The pilot program now covers 12 cities and regions, including Shanghai, Shenzhen, Chengdu, Changsha, Suzhou, Xi’an, Qingdao and Dalian, as well as the Hainan Province, the Xiongan New Area in Hebei Province, and selected sites in Beijing and Zhangjiakou that were part of the Winter Olympics zone.