Reference News Network, July 11 report - According to the South China Morning Post website on July 9, as China accelerates the promotion of digital RMB for global use, especially in cross-border trade within the countries participating in the "Belt and Road" Initiative, this move is interpreted as part of Beijing's grand strategy to reshape the global financial architecture.

Given the increasing fragmentation of international finance against the backdrop of trade wars and sanctions, Chinese experts point out that the dollar system supported by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) carries a risk of "weaponization."

As China promotes its central bank-backed digital RMB program, the influence of the West is gradually declining in parts of the Global South; this move also indicates that Beijing aims to cultivate a financial order that is more neutral in economic relations and ideology, and empowered by technology.

Last month, Governor Pan Gongsheng of the People's Bank of China announced the establishment of a Digital RMB International Operations Center in Shanghai and mentioned discussions on the development of a multipolar international monetary system. At the same time, U.S. tariff policies have also sparked interest in non-dollar assets and further internationalization of the RMB.

Beijing has signed documents with multiple central banks regarding cooperation on digital currencies and has begun to experiment with cross-border settlements using the digital RMB. This is increasingly seen as a means to rebuild international trade through China's digital infrastructure.

This strategy largely stems from serious dissatisfaction with the SWIFT-supported dollar system: after Russia was excluded from the system, many countries began seeking alternatives. China's solution includes establishing its own cross-border payment system and launching a central bank digital currency.

In a central bank digital currency pilot project in 2022, more than 160 transactions were conducted between banks in mainland China, Hong Kong, Thailand, and the UAE, with a total value of approximately $22 million.

Many developing countries find the digital RMB very attractive: faster settlement, lower fees, and the ability to avoid the impact of dollar fluctuations.

Some central banks in Southeast Asian countries are also exploring digital payments, from Cambodia's "Bakong" payment system to Thailand's "PromptPay" payment system. The appeal of China's digital payment solutions seems to be increasingly evident.

The report concludes that the digital currency plan highlights a subtle but profound shift: money and technology are merging with geopolitics. ASEAN and other middle powers may navigate between the dollar system and the China-led central bank digital currency system; they may embrace the digital RMB or use domestic systems to hedge risks. (Translated by Zheng Guoyi)

Original article: https://www.toutiao.com/article/7525659047345881646/

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