China’s Digital Yuan and the Geopolitics of Monetary Power

This paper examines China’s digital yuan as an instrument of geoeconomic statecraft within the shifting architecture of global finance. Rather than treating central bank digital currencies as mere technological innovations, it argues that the e-CNY project reflects a broader effort to reduce dependence on the dollar-centered financial order, strengthen monetary sovereignty, and expand Beijing’s capacity to shape cross-border payment infrastructures. The analysis situates the digital yuan alongside the institutions that actually carry China’s cross-border ambitions — the Cross-Border Interbank Payment System (CIPS) and the multi-CBDC platform Project mBridge — and tests these claims against the most consequential recent case of monetary realignment, the rerouting of Russia–China trade into renminbi after 2022. It also weighs the limits of the strategy: capital controls, trust deficits, surveillance concerns, the friction imposed by U.S. secondary sanctions, and the continued dominance of the dollar. The paper concludes that the digital yuan is unlikely to displace the dollar in the foreseeable future, and that its near-term significance lies less in the e-CNY itself than in what its development reveals about a slow fragmentation of global monetary power into competing payment platforms.