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Digital Yuan and the Future of Currency in a Globalized Economy

Author

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  • Muhammad Nadir Shabbir
  • Thuy Linh Duong

Abstract

With China’s Digital Yuan (e-CNY) rising as a major development, the fast rise of digital currencies is changing the scene of world finance. Theoretically and practically, this paper investigates how the Digital Yuan would affect the home and international economies. It looks at its evolution, acceptance, and relative merits with other central bank digital currencies (CBDCs) and cryptocurrencies. Domestically, the e-CNY is changing monetary policy, financial inclusion, and payment systems. Globally, it is challenging the hegemony of the U.S. dollar in international trade and reserve currencies, so perhaps changing world financial systems. The Digital Yuan begs questions about privacy, cybersecurity, and financial stability even as it provides efficiency and improved financial control. Inspired by comparable CBDC projects, the study offers policy suggestions for promoting global cooperation and combining innovation with financial stability. The results highlight China’s central influence on the direction of digital currencies as well as their wider economic consequences.

Suggested Citation

  • Muhammad Nadir Shabbir & Thuy Linh Duong, 2026. "Digital Yuan and the Future of Currency in a Globalized Economy," Chinese Economy, Taylor & Francis Journals, vol. 59(3), pages 211-235, May.
    • Handle: RePEc:mes:chinec:v:59:y:2026:i:3:p:211-235
    DOI: 10.1080/10971475.2025.2575414
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