The People’s Bank of China (PBOC) has established a new digital yuan operations center in the nation’s financial hub, Shanghai, in a move to foster the internationalisation of the yuan.
State-run media Xinhua News Agency said Thursday that the establishment is among the eight new initiatives announced by the PBOC.
As reported earlier, the central bank Governor Pan Gongsheng laid out an ambitious plan to create a multi-polar monetary system, where multiple currencies support the global economy. He also stressed the importance of advancing the yuan’s internationalization at the time.
Per the local news report, the Shanghai establishment aims to promote fintech developments and support innovation in digital finance.
Alongside, the center will focus on three major platforms, including a cross-border payment rail, blockchain services and a crypto platform.
The cross-border digital payment will explore the use of the digital yuan, dubbed e-CNY, in international transactions. Additionally, the blockchain and the digital asset platform will enable on-chain payments and near-instant crypto transfers.
“It contributes to enhancing China’s influence in the global financial system and provides an open, inclusive and innovative Chinese solution for improving the global cross-border payment system,” said Tian Xuan, president of the National Institute of Financial Research of Tsinghua University.
The launch of the hub marks an important step in the development of central bank digital currency (CBDC), he added.
China has spent years trying to internationalise the yuan, already testing the digital yuan through domestic pilot programs. During the trials, e-CNY was used for small everyday retail payments, government disbursements, salary transfers and public transport fares.
Though Beijing has been wary of crypto and mining, it has embraced blockchain tech for its traceability and transparency.
The digital yuan hub comes amid growing tensions with the US trade and tech issues. The move looks to reduce reliance on a US dollar-dominated financial system.
“Looking ahead, the PBOC will continue to support the steady and sustained development of the digital yuan international operations centre, providing robust support for the facilitation of cross-border trade, investment and financing,” central bank deputy governor Lu Lei told a news conference on Wednesday.
