China Wants the Yuan to Rival the Dollar: What That Means for Bitcoin

Geopolitical Context - The ongoing competition between the US and China is expected to persist, with the US aiming to maintain its leadership in technology and soft power [1] - China's position as the global manufacturing hub remains strong, while the US continues to dominate in global policing [1] Economic Sanctions and Market Impact - Russia faced sanctions and was excluded from the SWIFT system following its invasion of Ukraine, which has implications for global financial systems [2] - The market crash on October 10, 2025, was partly attributed to aggressive tariffs imposed on Chinese imports by the US [2] Currency Dynamics - President Xi Jinping has expressed a desire for the yuan to become a global reserve currency, challenging the dominance of the US dollar [3][5] - The yuan is already recognized as a reserve currency by some central banks, but the US dollar remains the primary currency for global oil transactions [3] Central Bank Initiatives - Xi's call for a "strong" yuan indicates a strategic shift towards promoting the yuan as a credible alternative to the US dollar, especially during times of uncertainty [6][7] - China is expanding its Cross-Border Interbank Payment System (CIPS) to compete with SWIFT, aiming to facilitate trade without US oversight [7] Digital Currency Adoption - The introduction of the "e-CNY" for international trade is part of China's strategy to enhance the yuan's global presence, offering faster and cheaper transactions outside the USD-based system [8]