China is promoting yuan as global currency as confidence in U.S. dollar decreases

From CNBC: 2025-06-24 20:09:00

China is expanding ways for foreign institutions to use the yuan as confidence in the U.S. dollar wavers. People’s Bank of China Governor Pan Gongsheng announced plans for a digital yuan center in Shanghai and the promotion of yuan foreign exchange futures trading.

In a move to challenge the dollar, three major Chinese exchanges now allow qualified foreign investors to trade more futures and options contracts. Beijing is increasing the influence of the yuan in the global commodity pricing system through expanding the range of hedging products for international institutions.

China aims to promote the yuan’s internationalization by allowing foreign currencies as collateral for trades settled in yuan. Morgan Stanley is offering brokerage services for mainland China commodity futures, marking a significant step in years of preparations to open up China’s financial markets to global investors.

China’s efforts to de-dollarize include promoting yuan-denominated trade settlement and offering financing for businesses in Hong Kong. Despite a decrease in global payments by value, the yuan remains the sixth most-active currency. The U.S. dollar and euro are still the most widely used currencies for global payments.

Beijing’s push to promote the yuan aligns with a broader shift away from the dollar in Asia. Geopolitical tensions, policy uncertainties, and increased currency hedging are driving the region’s reduced reliance on the U.S. dollar. Overseas investors are diversifying away from American assets and boosting the yuan.

Read more: China doubles down on promoting yuan as confidence in U.S. dollar ebbs