Xi Jinping wants a powerful currency. America's war has helped

A restaurant in Hong Kong accepts digital yuan, but the maître d’ confesses that so far, no one has ever used them. Yet, more than 5,000 stores in the city are ready to accept them. What appears to be a foodie tidbit conceals one of the major upheavals in global finance in recent years. The notion that the US dollar is the only currency used for business around the world is beginning to crumble, just as tensions between the United States and China are escalating. The uncomfortable truth is that the financial sanctions used by America to punish its rivals are accelerating the search for alternatives. Xi Jinping dreams not only of a powerful China, but of a China that is no longer forced to use payment channels controlled by Washington. A few years ago, the People’s Bank of China launched the e-CNY, a digital yuan, and has been promoting payment networks as alternatives to SWIFT, the system that connects nearly all the world’s banks but can be shut down by a U.S. policy decision. Until a few years ago, most trade between countries still involved the dollar. Today, in the wake of the war in Ukraine and the sanctions against Russia, more and more governments fear being cut off from these channels. For example, when Russia was cut off from SWIFT, Moscow had to quickly find alternatives to continue trading, and China was ready to help with its own systems. This is where Xi Jinping comes into the picture—he is the Chinese leader who, more than any other, has placed the issue of monetary sovereignty at the heart of China's geopolitical strategy. Xi has openly stated that China must prepare for “external storms” and build a payment network that cannot be blocked by anyone. One of his key moves was the launch of the e-CNY, which is now accepted by over 5,000 businesses in Hong Kong alone, but is also being tested in Africa and the Middle East, where China is investing heavily in infrastructure. The numbers speak louder than a thousand statements: in 2025, cross-border transactions in the yuan increased by 35% compared to the previous year. And in 2026, for the first time, the share of global trade settled in dollars fell below 80%. This does not yet represent an overtaking, but it is a historic crack in the dollar's supremacy. There is also a real-world example that makes it all tangible: a small machinery company in Vietnam which, after a temporary block on dollar payments for political reasons, started using the Chinese CIPS system to receive yuan directly from African customers. The owner says that, after an initial period of wariness, he now feels more at ease: “If they shut us out of the dollar tomorrow, at least we can keep working.” While many believe that a currency's strength is solely a matter of economics, recent history shows that financial wars can be as impactful as those fought with tanks. And there is a question that few people ask themselves: If the dollar is no longer neutral, which currency will become the new safe haven in times of crisis? This is where the truly groundbreaking aspect comes in: the success of the yuan is not necessarily all down to China. Paradoxically, it is precisely America’s aggressive moves that are prompting rival and allied countries to seek alternatives. Every time a bank is excluded from Western networks, the message is clear: it is best to be prepared. Today, those who feel vulnerable to sanctions are looking with interest at Chinese solutions, even though no one, not even in Beijing, expects the yuan to replace the dollar overnight. But the crack is there: the currency that dominates the world is no longer so secure in its throne. If you think the strongest currency is always the one associated with the largest economy, just look at Hong Kong: you can pay for congee with digital yuan, and no one is surprised anymore. If this story resonates with you, on Lara Notes you can hit I'm In – it's not a 'like,' it's your way of saying: This idea is now mine. And if tomorrow you tell someone that financial wars are changing the way the world pays for dinner, you can mark it on Lara Notes: Shared Offline is your way of saying that conversation mattered. This Note comes from The Economist and saved you almost five minutes compared to the original article.