- Governor Pan said blockchain supports stablecoin growth and disrupts outdated cross-border payment systems with faster, decentralized settlement structures.
- The PBOC will establish an international digital yuan operations center in Shanghai to expand global adoption and challenge U.S. financial dominance.
- Pan stated that digital tools like smart contracts and DeFi will advance cross-border payments and reduce risks tied to traditional payment systems.
The digital yuan is set to gain wider international use as China advances its efforts to modernize global finance and payment networks through emerging digital technologies.
PBOC Governor Cites Blockchain’s Role in Modernizing Finance
Pan Gongsheng, Governor of the People’s Bank of China, emphasized that blockchain has accelerated the rise of stablecoins and reshaped global payment infrastructure. He noted that the technology is driving structural changes in how transactions are settled internationally.
“Blockchain has promoted the vigorous development of stablecoins, achieved the transformation of the traditional payment system from the bottom up,” Pan said. “It has significantly shortened the cross-border payment chain and posed a huge challenge to financial supervision.”
Pan also stated that smart contracts and decentralized finance will “continue to promote the evolution and development of the cross-border payment system,” suggesting a future in which these tools play a key role in financial innovation and global connectivity.
He explained that traditional payment systems are inefficient and exposed to geopolitical risk, describing them as “easily politicised and weaponised, and used as a tool for unilateral sanctions.”
China Calls for Multipolar Global Currency Framework
During the forum, Pan reiterated China’s goal of developing a more diversified international monetary system. He proposed a shift from a dollar-dominated structure to a competitive framework involving multiple major currencies.
“Developing a multipolar international monetary system will help strengthen policy constraints on sovereign currency countries,” he said. “It will enhance the resilience of the system and better safeguard global financial stability.”
Pan suggested that several global currencies may work in parallel, providing balance and reducing dependence on any one of them. His comments come on the heels of increasing global scrutiny of U.S. monetary policy and deteriorating demand for dollar-based assets in light of shifting investment and trade flows.
The drive to establish a digital yuan complements China’s desire to promote the renminbi for international use. The adoption of a digital renminbi has been gaining traction around the world, particularly in Russia and China’s other major trading partners, even as the country is slow to open its capital account.
Foreign Banks Adopt CIPS to Facilitate Yuan Settlements
China is also expanding its infrastructure to support wider use of the digital yuan. Six foreign banks, including Standard Bank and First Abu Dhabi Bank, have agreed to use the Cross-Border Interbank Payment System (CIPS), according to reports by state broadcaster CCTV.
Pan remarked that digital systems like CIPS “expose the weakness of traditional cross-border payment systems,” particularly their inefficiency and susceptibility to sanctions.
Other Chinese officials underscored the country’s devotion to monetary stability and openness.“China’s ability to counter forex market volatility has improved,” said Zhu Hexin, head of the State Administration of Foreign Exchange.
Li Yunze, Director of the National Financial Regulatory Administration, added: “Foreign institutions are important bridges and links for attracting investment, talent, and are active contributors to China’s modern financial system.”
