China’s Central Bank Wants the Yuan to Matter More Globally, But Big Hurdles Remain

China’s central bank governor, Pan Gongsheng, announced a new plan on June 18, 2025, to make the yuan more important in the world economy.

The People’s Bank of China will set up a center in Shanghai to help the digital yuan grow internationally and will launch new financial tools to make it easier for global investors to use the currency.

China hopes this will help the yuan compete with the US dollar in global trade and finance. China has already made some progress. It has signed agreements with 29 other central banks so they can use the yuan for trade and investment.

The country has also opened up some of its financial markets to foreigners and created a system for cross-border payments in yuan. Pan’s plan includes launching yuan futures trading in Shanghai, which will help investors manage currency risk.

According to SWIFT, a global payment network, the yuan now makes up just over 4% of all international payments. The US dollar, however, still leads by a wide margin, handling about 48% of global payments.

Many businesses remain cautious about using the yuan. Surveys show that almost half of companies say their partners do not want to use the yuan, often because of China’s complex rules and unpredictable policies.

China’s Push for the Yuan Faces Major Hurdles

More than 60% of companies say Chinese regulations make it hard to use the yuan smoothly. Most international trade still happens in dollars, and many companies quickly switch yuan back to dollars after doing business in China.

Political risks add to these worries. The US has used its financial system to punish countries and companies that break its rules. If the US government threatened to cut off countries that use the yuan in trade with China, most businesses would avoid the risk and stick with the dollar.

China’s plan shows it wants the yuan to play a bigger role internationally, but the numbers make it clear: the yuan is still far behind the dollar. For the yuan to catch up, China would need to make its financial system more open and predictable. Until then, most of the world will keep using the dollar.

This story matters because it affects how businesses around the world trade, invest, and manage risk. If China’s plan works, it could change the balance of power in the global economy. For now, though, the dollar remains king.