Takeaways
China's central bank has opened a digital yuan operations center in Shanghai featuring platforms for cross-border payments, blockchain technology and digital assets.
The center will oversee the development and operation of cross-border payment systems and blockchain infrastructure, and promote connectivity between domestic and international financial networks.
The digital yuan operations center is expected to support trade, investment, and innovation in digital finance, while strengthening links between China's financial systems and those overseas.
China’s central bank has opened a digital yuan operations center in Shanghai featuring platforms for cross-border payments, blockchain technology and digital assets, marking another step in the country’s push for global adoption of its currency.
The People’s Bank of China’s new digital yuan hub will oversee the development and operation of cross-border payment systems and blockchain infrastructure, while also promoting connectivity between domestic and international financial networks, state-run media Xinhua News Agency reported Thursday, citing the central bank.
PBOC Deputy Governor Lu Lei said a preliminary cross-border financial infrastructure for the digital yuan is already in place, according to the report. The center is expected to support trade, investment, and innovation in digital finance, while strengthening links between China’s financial systems and those overseas.
The new center is one of several measures that PBOC Governor Pan Gongsheng announced in June to open up China’s financial markets and expand the currency’s global reach. Other initiatives include exploring yuan futures trading to diversify currency products and encouraging trade companies to issue offshore bonds in Shanghai.
“The move suggests dual track for China on digital yuan: onshore CBDC and offshore stablecoins,” said Zhaopeng Xing, a senior China economist at Australia & New Zealand Banking Group Ltd. “I expect the center will be defensive amid the private stablecoins wave.”
The central bank digital currency, or the electronic version of the onshore yuan, will be key to maintaining China’s “currency sovereignty,” just as the authorities seek to expand the Chinese currency’s international role with offshore yuan-backed stablecoins, he said.
China has been positioning the yuan as a rival to the dollar, part of President Xi Jinping’s broader effort to build a financially powerful nation anchored by currency stability. The push has gained urgency amid escalating trade tensions under US President Donald Trump’s second term.
Meanwhile, the yuan has already overtaken the dollar in recent years for China’s cross-border transactions, and the country’s own payment system, CIPS, has been gaining traction. Earlier this year, the system expanded to cover more foreign banks, including United Overseas Bank.
That said, Xing cautioned that the digital yuan operations center will face challenges, such as the use of China’s CBDC being capped within the bilateral arrangements the PBOC has with other central banks.
