The Governor of the People’s Bank of China, Pan Gongsheng, announced the establishment in Shanghai of an international operations center for the digital RMB, its central bank digital currency (CBDC). He also discussed the expansion of international trade finance, with industry pundits suggesting this aims to improve financing for Chinese goods that are finished in other countries to sidestep sanctions.
A speech published by the central bank did not cover these operational details, but instead urged changes in global currencies and cross border payments.
The governor strongly criticized the US, although semi-indirectly. He said that international dominant currencies are like public goods. When the country that controls the currency starts using the currency for its own self interest it undermines that public good feature. He warned that accumulated domestic fiscal and structural issues in that country could spill over into an international financial crisis. Additionally, the Governor complained about the weaponization of currency for geopolitical purposes.
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