Digital Yuan Strategy Shifts as China Targets Blockchain-Powered Trade Finance
China is advancing its digital yuan initiative with a strategic shift toward international use, announcing the launch of a new cross-border operations hub in Shanghai.
The move was confirmed by Pan Gongsheng, Governor of the People’s Bank of China, during the Lujiazui Forum held on June 18. The centre will serve as a pilot platform for blockchain-powered trade finance and will play a central role in streamlining cross-border payments using the digital yuan (e-CNY).
The announcement underscores Beijing’s plan to reposition the e-CNY as a key player in global commerce, rather than merely a domestic payment tool. Although digital currency has been in trial since 2020 and rolled out in 29 cities, its usage remains limited.
As of mid-2025, the e-CNY accounts for only 0.16% of China’s total payment volume, falling far short of the adoption levels seen with private platforms like Alipay and WeChat Pay. Even with state-sponsored incentives such as digital currency giveaways, public response has remained muted.
Still, China views the e-CNY as a foundational element of a new financial infrastructure. The creation of the Shanghai hub marks a clear pivot from encouraging small-scale retail adoption to building blockchain-based systems for international trade and finance.
Pan explained that the digital yuan is being aligned with a broader vision of a multipolar monetary future—one in which global payments are no longer dominated by a single currency.
He noted that while stablecoins have emerged as fast and flexible cross-border payment solutions, they often operate without adequate regulatory oversight.
By contrast, China’s central bank digital currency is designed to offer the benefits of instant settlement and smart contract integration, while retaining the control and transparency that come with state backing.
This shift reflects a calculated reassessment of China’s CBDC strategy amid slow domestic traction and an evolving global financial landscape. By anchoring the e-CNY to international trade goals and leveraging blockchain efficiencies, China is signalling its intent to reshape cross-border payments through state-managed digital infrastructure.
