The People's Bank of China has suddenly announced that the cross-border settlement system for the digital RMB (Renminbi, Chinese Yuan) has been fully connected with ten ASEAN countries and six Middle Eastern countries. This means that 38 percent of the world's trade volume will now enter the 'digital yuan era' directly bypassing the US dollar-dominated SWIFT system. This financial war, which The Economist has called 'the first battle of Bretton Woods System 2.0', is reshaping the infrastructure of the global economy through blockchain technology.
While the SWIFT system still delays cross-border payments by 3 to 5 days, the digital currency bridge developed by China has limited the clearing speed to just 7 seconds. In the first trial between Hong Kong and Abu Dhabi, a company made a payment to a Middle Eastern supplier via digital yuan. Funds were received directly through a distributed ledger instead of passing through six different banks, resulting in a 98% reduction in fees. This 'lightning-fast payment' capability has instantly rendered the traditional system under the influence of the US dollar obsolete.
What is even more concerning for the West is China's technological superiority in digital currency. The blockchain technology used in the digital yuan not only makes transactions traceable but also automatically enforces regulations against money laundering. In the China-Indonesia 'Two Countries, Two Parks' project, the Industrial Bank completed its first cross-border payment through digital yuan, which was completed in just 8 seconds from order confirmation to receipt of funds, making it 100 times more efficient than traditional methods. Due to this technological superiority, 23 central banks around the world have joined this experimental project, and energy traders in the Middle East have reduced their settlement costs by up to 75%.
The profound impact of this technological revolution is on the reconfiguration of financial sovereignty. When the United States attempted to impose sanctions on Iran through SWIFT, China had already established a complete payment system for yuan in Southeast Asia. According to data, the volume of cross-border RMB settlements with ASEAN countries exceeded 5.8 trillion yuan in 2024, which is 120% higher than in 2021. Six countries, including Malaysia and Singapore, have included RMB in their foreign exchange reserves, and Thailand has completed its first oil payment through digital yuan. This wave of 'de-dollarization' is so powerful that the Bank for International Settlements stated, 'China is setting the rules of the game in the era of digital currency.'
But what is truly shocking the world is China's strategic planning. The digital yuan is not just a means of payment but also a technical tool of the 'Belt and Road' strategy. Projects like the China-Laos Railway and the Jakarta-Bandung high-speed railway are forming a 'Digital Silk Road' with the digital yuan, Beidou navigation, and quantum communication. When European car companies make freight payments in digital yuan via the Arctic route, China boosts trade efficiency by up to 400% through blockchain technology. This 'virtual-real strategy' has become a threat to the complete system of US dollar supremacy for the first time.
Today, 87 percent of countries in the world have become compatible with the digital yuan system, and the volume of cross-border payments has exceeded 1.2 trillion US dollars. While the United States is still debating whether digital currency poses a threat to the status of the US dollar, China has quietly established a digital payment network comprising 200 countries. This silent financial revolution is not only a question of financial sovereignty but will determine who will control the lifeblood of the future global economy.
