Core Viewpoint - The establishment of the Shanghai Cooperation Organization (SCO) Development Bank is aimed at increasing RMB financing and exploring a non-USD settlement network, responding to emerging countries' needs for stable exchange rates and infrastructure financing [2][4][10]. Group 1: RMB Internationalization - As of July 2023, RMB accounted for 2.88% of international settlements, ranking sixth after USD, EUR, GBP, JPY, and CAD [6][7]. - Following the fall of the Trump administration's policies, there is a growing demand among emerging countries to reduce reliance on the USD and stabilize their currencies [6][10]. - The RMB's share in international settlements previously peaked at around 4.7% but fell below 3% by May 2025, indicating market concerns over geopolitical tensions affecting currency transactions [9]. Group 2: Development Bank's Purpose - The SCO Development Bank aims to provide a new source of development funding for emerging countries, enhancing China's influence as a leading player [5][10]. - The bank's establishment is seen as a response to the U.S. prioritizing its own interests, which has led to dissatisfaction among emerging nations [5][10]. - The bank's timeline and specific plans are still under discussion, but the potential for increased bad debt risks exists if large-scale funding is deployed [10]. Group 3: Economic Security and Risks - Expanding RMB transactions is crucial for China's economic security, allowing it to stabilize trade activities even under U.S.-led financial sanctions [10]. - The "Belt and Road Initiative" has faced challenges, with investment amounts dropping significantly post-2020 due to the pandemic, leading to increased concerns over bad debts [11]. - The total amount of "problem debts" from 2020 to 2022 reached $76.8 billion, a significant rise from $17 billion in the pre-pandemic period [11]. Group 4: Challenges to RMB Usage - The strict controls on RMB's cross-border flow and exchange difficulties hinder its internationalization [12]. - To enhance the RMB's presence, it is essential to relax capital controls, but current economic uncertainties and outflow pressures complicate this process [12].