“Head of the Central Bank of China expects the new currency order to challenge the dollarThe head of the Central Bank of China announced the emergence of a new currency order, where the yuan will compete with the dollar. China strives for a multipolar system against the background of trade disputes with the United States.”, — write: unn.ua
DetailsSpeaking at China’s main financial forum in Shanghai, Pan Gongsheng said that the US dollar “established its dominance” after World War II and “has maintained its status until now.” He warned of “excessive dependence” on a single currency.
“In the future, the global monetary system may continue to develop towards a model in which several sovereign currencies coexist, compete with each other, and restrain and balance each other,” he said, pointing to the growing role of the yuan.
Pan said that the key events in the international monetary system over the past two decades were the introduction of the euro and the growth of the yuan after the 2008 global financial crisis.
He noted that the yuan is the second largest trade finance currency and the third largest payment currency in the world.
His comments came the day after Christine Lagarde, President of the European Central Bank, said that the “dominant role of the dollar” is “no longer defined”, creating an opportunity for the euro to gain “global popularity.”
Ukraine is considering switching from the dollar to the euro as its base currency – NBU Governor Pyshnyy08.05.25, 02:02 • 14272 views
Pan’s comments also indicate that China’s long-standing desire for a “multipolar” monetary system has been revived, amid China’s confrontation with the United States over trade and the introduction of higher tariffs by Donald Trump.
Beijing and Washington have reached a fragile truce that has reduced tariff levels after an April escalation, but tensions remain high under a new US administration that has hit international trade.
“When geopolitical conflicts, national security interests or even wars arise, the dominant international currency easily becomes a tool and a weapon,” Pan said.
Pan and Lagarde met in Beijing last week to sign a memorandum of understanding on cooperation in central banks, which contains a framework for regular dialogue.
Pan also pointed to discussions around the wider use of SDRs – a basket of currencies defined and supported by the IMF – as a potential alternative that could help “overcome the inherent problems of a single sovereign currency as the dominant international currency.”
His comments coincided with numerous announcements on Wednesday related to China’s move towards a more yuan-oriented currency system, including an international operations center for the digital yuan in Shanghai.
Six foreign institutions, including Singapore’s OCBC Bank and Kyrgyzstan’s third-largest lender Eldik Bank, also said they would join China’s Cross-Border Interbank Payment System (Cips), an alternative to the global Swift payment system.
The authorities of Hong Kong and Shanghai also signed on Wednesday an “action plan” to strengthen financial ties, including the management and distribution of assets denominated in yuan.
Zhu Hexin, Deputy Governor of the People’s Bank of China and head of the State Administration of Foreign Exchange, said that Beijing will expand the scheme allowing domestic investors to buy assets outside of China. Zhu said that the expansion of the Qualified Domestic Institutional Investors scheme will “meet the growing needs of domestic investors in offshore investments.”
Euro is getting more expensive faster than dollar: why hryvnia is losing ground – explanation of financial expert Olena Sosiedka16.06.25, 15:56 • 171848 views