PBoC pushes yuan use in global trade amid rising tensions

The People’s Bank of China (PBoC) is stepping up efforts to internationalize the yuan, encouraging state-owned enterprises (SOEs) to conduct more payments and settlements in the Chinese currency during overseas operations.

PBoC pushes yuan use in global trade amid rising tensions

The move comes as Beijing seeks to shield its economy from external vulnerabilities amid intensifying trade tensions, particularly with the United States. In a joint notice issued Monday alongside key financial regulators and the Shanghai municipal government, the central bank outlined a series of measures aimed at bolstering the yuan’s global profile. Among the initiatives, the PBoC urged Shanghai-based commercial banks to expand their cross-border credit offerings, aiming to lower yuan financing costs and stimulate yuan-denominated imports and exports. By making it easier and cheaper for businesses to transact internationally in yuan, the authorities hope to reduce reliance on the US dollar and mitigate risks stemming from future geopolitical or financial market disruptions. The central bank also pledged to enhance the infrastructure underpinning cross-border yuan transactions, notably by upgrading the Cross-Border Interbank Payment System (CIPS). Improvements to CIPS are intended to streamline settlement processes, boost transaction security, and make it a more competitive alternative to established dollar-based systems like SWIFT. As part of this broader effort, the PBoC emphasized promoting the use of blockchain technology to enhance the speed, transparency, and security of global payment services.

PBoC throws its support behind the Shanghai Gold Exchange

In addition, the PBoC threw its support behind the Shanghai Gold Exchange’s plans to strengthen collaboration with overseas exchanges. The goal is to expand the use of yuan-denominated benchmark gold prices in major international markets, further embedding the Chinese currency into the global commodities landscape. Such steps are seen as key to establishing broader trust and liquidity in yuan-based financial instruments and pricing mechanisms. Analysts view these moves as part of China's long-term strategy to build greater resilience against external shocks, particularly in a world where financial and trade relationships are becoming increasingly politicized. Although the international adoption of the yuan still trails well behind the dollar and euro, ongoing policy support, combined with growing geopolitical fractures, could accelerate its gradual rise on the global stage.