China's central bank (People's Bank of China) has suddenly announced that the cross-border settlement system of the digital RMB (Renminbi, Chinese Yuan) has been completely connected with ten ASEAN countries and six Middle Eastern countries. This means that 38% of the world's trade volume will now bypass the US dollar-dominated SWIFT system and enter the 'digital Yuan era' directly. This financial war, which The Economist has termed 'the first battle of Bretton Woods System 2.0,' is changing 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 experiment between Hong Kong and Abu Dhabi, a company made a payment to a Middle Eastern supplier through digital Yuan. Funds were received directly through a distributed ledger instead of passing through six different banks, and fees were reduced by up to 98%. The capability of this 'lightning-speed payment' 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 technical 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 the first cross-border payment through digital Yuan, which was accomplished in just 8 seconds from order confirmation to receipt of funds, making it 100 times more efficient than traditional methods. Due to this technical 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 deep impact of this technological revolution is on the new formation of financial sovereignty. When the United States tried to impose sanctions on Iran through SWIFT, China had already established a complete system of Yuan payments 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 compared to 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 really 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 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 full system of US dollar hegemony for the first time.
Today, 87% of the world's countries have aligned with the digital Yuan system, and the volume of cross-border payments has exceeded 1.2 trillion US dollars. While the US 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 just a matter of financial sovereignty but will determine who controls the lifeblood of the future global economy.