China's Central Bank to Launch Digital Yuan International Center in Shanghai

China's central bank will establish an international operation center for its digital yuan in Shanghai as part of efforts to expand the currency's global reach, People's Bank of China Governor Pan Gongsheng announced Wednesday, while acknowledging that stablecoins are fundamentally reshaping cross-border payment infrastructure.

Speaking at the Lujiazui Forum, Pan unveiled the e-CNY international center as one of eight key policy measures aimed at promoting the digital yuan's internationalization, according to a Xinhuanet report. The announcement represents a significant step in China's efforts to expand adoption of what is widely considered one of the world's most advanced central bank digital currencies.

"The application of emerging technologies in cross-border payments is gaining momentum, with blockchain and distributed ledger technology driving the rapid growth of CBDCs and stablecoins," Pan said in translated remarks at the forum, which brought together top financial regulators and industry executives.

Pan noted that these technological innovations "are enabling real-time settlement at the point of payment, fundamentally reshaping the traditional payment infrastructure and significantly shortening the cross-border payment chain." His comments represent a rare public acknowledgment by Chinese monetary authorities of stablecoins' growing influence on global payment systems.

The timing of Pan's announcement comes just one day after the U.S. Senate passed the GENIUS Act, landmark stablecoin legislation that now moves to the House of Representatives for consideration. While China continues to ban cryptocurrency trading and mining domestically, Pan's remarks signal recognition of digital assets' broader impact on international finance.

Despite various government support measures since its 2019 pilot launch, the e-CNY has faced adoption challenges. The new Shanghai center aims to address this by focusing specifically on international operations and financial market business development, according to Xinhuanet's coverage of the forum.

Pan also highlighted regulatory challenges posed by emerging financial technologies. "At the same time, these developments pose substantial challenges for financial regulation," he said. "Technologies such as smart contracts and decentralized finance are expected to continue advancing the evolution of the global cross-border payment ecosystem."

The central bank governor warned about insufficient regulatory oversight in digital finance sectors. "Regulatory oversight remains insufficient in several emerging areas of digital finance," Pan stated. "For the rapidly expanding crypto asset market and climate risk-related regulatory frameworks, global regulatory coordination is insufficient, with regulatory approaches swinging drastically and being overly driven by politics."

Among the other policy measures announced, Shanghai will pilot blockchain-based trade finance tools as part of structural monetary policy innovations. The city will also develop offshore free trade bonds following "two ends abroad" principles and internationally accepted standards to broaden financing channels for companies participating in Belt and Road Initiative projects.

Additional measures include establishing an interbank market transaction reporting database for high-frequency analysis of financial sub-markets, creating a personal credit reporting agency, and launching a comprehensive reform pilot for offshore trade financial services in Shanghai's Lingang New Area.

The PBOC will also collaborate with China's securities regulator to study RMB foreign exchange futures trading, aimed at improving foreign exchange market products and helping financial institutions manage exchange rate risks more effectively.

China's push to internationalize the digital yuan comes as central banks worldwide develop their own digital currencies, with several countries exploring cross-border CBDC arrangements to reduce reliance on traditional payment rails dominated by Western financial institutions.