China is intensifying efforts to elevate the yuan’s international standing and challenge the U.S. dollar’s global dominance, seizing an opportune moment as international confidence in the greenback falters. Beijing’s aim is to diversify global currency use even as the dollar remains the world’s predominant currency.

Beijing’s ambition to internationalize the yuan is buoyed by exceptionally favorable market conditions. The U.S. dollar index has plummeted by more than 9% this year, while the offshore yuan has strengthened by over 2% against the weakening dollar.

The report that China is now actively growing yuan acceptance globally comes amid increasing efforts by the so-called Global South to de-dollarize. Championed primarily by Russia after it was slapped with Western sanctions, the de-dollarization campaign has encouraged countries opt to settle trade with their own currencies. There has also been talk of launching an alternative reserve currency, but no concrete steps towards attaining this goal have been made.

Although China has been sympathetic to the de-dollarization cause, the country has until recently largely avoided openly seeking to replace the dollar with its currency. However, this appears to be changing, as evidenced by People’s Bank of China Governor Pan Gongsheng’s recent speech, in which he discussed “how to weaken excessive reliance on a single sovereign currency.”

Gongsheng also revealed plans for a new center dedicated to digital yuan internationalization in Shanghai and a push to promote trading of yuan foreign exchange futures. This builds on China’s existing rollout of a digital yuan designed to replace some physical cash.

According to a CNBC report, much of China’s recent strategy centers on expanding access to its futures market. To illustrate, recently, three major Chinese exchanges announced that qualified foreign institutional investors can now trade 16 additional futures and options contracts, including commodities like natural rubber, lead and tin. This follows dozens of other tradable futures contracts added for foreign investors earlier this year, according to Zhou Ji, a macro foreign exchange innovation analyst at Nanhua Futures.

Zhou emphasized that these expansions broaden hedging options for international institutions. They also amplify the yuan’s influence within the global commodity pricing system. In another step to encourage yuan usage, the Shanghai Futures Exchange is exploring a proposal to allow foreign currencies as collateral for yuan-settled trades.

Other incremental but significant steps include permitting qualified foreign investors to participate in on-exchange exchange-traded fund options trading for hedging purposes starting Oct. 9. Earlier this year, authorities also reportedly waived a $70 (500 yuan) fee for international financial institutions opening local accounts for bond market access.

However, while global financial institutions are keen to diversify into China, concerns over the country’s strict capital outflow controls are believed to have hindered large-scale buying of mainland Chinese assets.

Meanwhile, besides investment products, China has systematically built a vast network of offshore yuan clearing banks and championed its cross-border interbank payment system. A recent U.S. Federal Reserve analysis indicated a growing trend of Chinese banks lending to emerging market economies in yuan rather than U.S. dollars, partly driven by lower lending costs.

Despite these efforts, the yuan saw a slight decline in international use in May, dropping to 2.89% of transactions by value, according to Swift’s RMB Tracker. The U.S. dollar, in contrast, accounted for 48.46% of global payments, followed by the euro at 23.56%.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。