The People’s Bank of China (PBOC) plans to establish an international operation center for the digital yuan (e-CNY) in Shanghai.

Governor Pan Gongsheng announced the initiative during the Lujiazui Forum on June 18, aiming to boost the global adoption of the e-CNY.

He highlighted the growing role of blockchain and distributed ledger technologies in cross-border payments and real-time settlements.

Pan also addressed the opportunities and challenges of these innovations, including stablecoins, CBDCs, decentralized finance, and smart contracts.

While China supports blockchain advancement, cryptocurrency trading and mining remain banned.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: The Block

🧠 Food for thought

1️⃣ The e-CNY reflects China’s dual strategy: domestic challenges, global ambitions

China’s push to internationalize the digital yuan highlights a notable contrast between its domestic struggles and international aspirations.

Despite being one of the world’s most advanced CBDCs and expanding to 29 pilot cities, the e-CNY has processed only about $260 billion since its inception, significantly less than the $17 trillion processed annually by Alipay alone1.

This domestic adoption challenge persists despite numerous government incentives including lotteries and giveaways aimed at encouraging citizens to use the digital currency2.

Meanwhile, China’s international ambitions are evident in initiatives like the mBridge project (with Hong Kong, Thailand, and UAE), which has reduced cross-border settlement times to just 7 seconds and cut transaction costs by 98% compared to traditional SWIFT-based systems34.

The contrast illustrates how China’s CBDC strategy balances addressing immediate adoption challenges at home while simultaneously positioning for long-term global financial influence abroad.

2️⃣ Central banks worldwide are prioritizing practical payment solutions over CBDCs

Despite the rapid global exploration of CBDCs, central banks are taking a pragmatic approach to payment system improvements.

A recent survey revealed that 93.6% of central banks currently prioritize enhancing instant payment systems over CBDCs for improving domestic payment infrastructure5.

This preference for enhancing existing systems reflects the practical challenges of CBDC implementation, as seen in China where the e-CNY struggles to compete with established payment platforms like WeChat Pay and Alipay2.

The global CBDC landscape has nonetheless expanded dramatically, with 134 countries (representing 98% of global GDP) now exploring digital currencies—a remarkable increase from just 35 countries in May 20206.

Of these nations, 66 are in advanced exploration phases (development, pilot, or launch), showing how central banks are balancing immediate payment system improvements with longer-term digital currency development6.

3️⃣ The competitive landscape between CBDCs and stablecoins is reshaping global finance

Central banks are increasingly acknowledging the impact of both government-issued CBDCs and privately-issued stablecoins on global payment infrastructure.

PBoC Governor Pan’s public acknowledgment that stablecoins are “fundamentally reshaping traditional payment infrastructure” signals growing recognition of private digital currencies’ influence on the financial system.

The distinction remains clear: CBDCs like the e-CNY are direct liabilities of central banks and legal tender, while stablecoins are created by private companies and pegged to fiat currencies without legal tender status7.

This evolving dynamic is occurring as the U.S. Senate passed the GENIUS Act for stablecoin regulation, demonstrating how major economies are developing frameworks for both types of digital currencies simultaneously.

The international financial landscape is being reshaped as these technologies enable “real-time settlement at the point of payment,” creating both opportunities for efficiency and challenges for existing financial institutions and regulators8.

Recent People’s Bank of China developments

……