China’s central bank, known officially as the People’s Bank of China (PBOC), has launched a new international operations centre in Shanghai for the Chinese government’s central bank digital currency (CBDC), the digital RMB, according to a Thursday report from China’s state-run news outlet.
PBOC governor, Pan Gongsheng, said the purpose of the new operations centre is to accelerate the internationalisation of China’s digital RMB and increase its use throughout the global financial system. As part of the launch, the centre also unveiled three new platforms: a cross-border payments platform, a blockchain service platform, and a digital asset platform.
Tian Xuan, president of China’s National Institute of Financial Research at Tsinghua University, said the centre marks a significant milestone in the continued development of the digital RMB.
“It contributes to enhancing China’s influence in the global financial system and provides an open, inclusive and innovative Chinese solution for improving the global cross-border payment system,” Tian said.
Pan first announced the launch of the operations centre in June at a gathering of local and international executives and regulators known as the Lujiazui Forum, as part of a raft of measures to expand the role China’s RMB plays in the global economy.
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The operations centre’s launch comes amid a broader push by China to increase its global financial footprint and lessen global reliance on the US dollar. Reuters reported that Pan said during the Lujiazui Forum in June that he expects the digital RMB to emerge as one of several important regional digital currencies that will compete for prominence in the global financial system.
Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability.
Pan Gongsheng, governor of People’s Bank of China China has had long-term aspirations for its yuan (RMB) to become more prominent on the global financial stage, similar to the US dollar or the Euro.
According to Reuters, this ambition has so far been hampered by China’s reluctance to fully open up to foreign investment and this is unlikely to change much in the medium-term. However, the Chinese RMB has seen an acceleration in adoption inside China’s sphere of influence in places such as Russia and parts of the Middle East.
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As part of the expanding use of the yuan, six international banks — including South Africa–based Standard Bank and First Abu Dhabi Bank — agreed earlier this year to use China’s Cross-border Interbank Payment System (CIPS), according to Chinese state broadcaster CCTV.
Pan said he believes new technologies, including blockchain and digital assets, have highlighted weaknesses in existing cross-border payment systems, such as their relative inefficiency and potential to be used to gain geopolitical advantage.
“Traditional cross-border payment infrastructures can be easily politicised and weaponised, and used as a tool for unilateral sanctions, damaging global economic and financial order,” Pan said.
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