Core Insights - The Chinese yuan has become a significant force in the reform of the international monetary system, ranking as the second-largest trade financing currency and the third-largest payment currency globally by 2024, while the decline of the US dollar's credit is leading to oligopolistic competition in currencies [1] - The internationalization of the yuan is entering a new strategic opportunity period, influenced by the "America First" policies of the Trump administration, which have disrupted the post-World War II international political and economic order [1][12] - The yuan's internationalization is not aimed at replacing the dollar but rather at promoting a more balanced global monetary and financial system [5] Group 1: Theoretical Foundations and Research Progress - Since the international financial crisis, research on the internationalization of the yuan has rapidly accumulated, forming a mature research framework [2] - The three basic functions of international currency—unit of account, medium of exchange, and store of value—are supported by national credit [3] - Four key factors influence the process of currency internationalization: large economic scale, deep financial markets, currency stability, and network externalities [4] Group 2: Progress and Benefits of Yuan Internationalization - The yuan has made significant progress since the initiation of cross-border trade settlement in 2009, becoming the fifth-largest currency in global foreign exchange trading by 2022 and the second-largest trade financing currency by 2024 [7] - The internationalization of the yuan has improved trade settlement efficiency and risk management capabilities, contributing to financial reforms [7][9] - By 2024, the yuan accounted for approximately 30% of China's goods trade settlement and over 50% of cross-border payments [8] Group 3: Challenges and Constraints - The internationalization of the yuan faces challenges, including an imbalance in the three functions of international currency, particularly in its role as a reserve currency [19] - The yuan's share in global official foreign exchange reserves is only 2.1%, significantly lower than the dollar and euro [21] - Structural barriers, such as the incomplete convertibility of capital accounts and the need for deeper financial market development, hinder the yuan's internationalization [22] Group 4: Policy Recommendations - To promote the internationalization of the yuan, it is essential to increase the supply of high-quality safe assets and improve the capital market's investment and financing system [25] - Enhancing the openness of the futures market and improving financial infrastructure are critical steps [26] - Strengthening regulatory capabilities in an open capital market environment is necessary to manage risks effectively [27]