Banking Khabar / China has stepped up efforts to increase the international use of its currency, the yuan. The People’s Bank of China (PBOC) has unveiled a new strategy aimed at promoting wider adoption of the yuan worldwide.
At present, the yuan accounts for only 3.75 percent of global payments, its lowest level since 2014. Yuan reserves in Hong Kong have also declined. In response, China has formulated a plan to strengthen the global presence of its currency.
Key Strategies
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Expanding the use of the yuan through cooperation with other countries
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Making cross-border payments and investments in yuan easier
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Improving necessary financial infrastructure to broaden yuan usage
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Increasing the use of the digital yuan (e-CNY) for cross-border payments
Digital Initiative: mBridge
Through the mBridge network developed by China, more than USD 55 billion in transactions have already been conducted using the digital yuan. This initiative is expected to play a key role in expanding the yuan’s global reach.
Current Situation
While the use of the yuan is gradually increasing, it still remains far behind the US dollar. Experts say that for the yuan to succeed internationally, China will need to ensure credible markets, greater financial openness, and robust international infrastructure. China’s strategy is expected to promote currency diversification in global markets and influence the balance of economic power worldwide.
