China’s yuan reshaping global order – but US-backed stablecoins seen as a threat

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The yuan’s internationalisation remains on an upwards, if uneven, trajectory and is gradually reshaping the global monetary order, according to a new study released at a high-profile economic forum in Beijing – though some participants warned US efforts to dominate digital finance pose risks.

The yuan internationalisation index, which tracks the currency’s global use, rose by about 11 per cent in 2024 to 6.06, according to the Renmin University report released at this year’s International Monetary Forum, co-hosted with Nankai University on Sunday.

By comparison, the US dollar scored 51.13 in 2024, down from 51.52 the previous year, while the euro slipped 3.8 per cent to 24.07 on the index.

Meanwhile, the yuan ranked ahead of the British pound and Japanese yen, which scored 4.47 and 3.69 respectively. The report predicted the Chinese currency would strengthen further and widen the gap with both.

Beijing has worked to steadily increase the yuan’s global use – especially as it doubles down on efforts to manage risks in cross-border capital flows.

“The spillover effects of geoeconomic shocks have not only weighed on China’s real economy and financial markets, but also disrupted global trade and investment systems, supply chains and international financial markets,” the report’s authors wrote.

“Promoting the yuan’s internationalisation and leveraging it to push for reform of the global monetary system is a key strategy to mitigate geoeconomic risks.”