China’s digital RMB is causing the BRICS countries and many others in the Global South to question the continued utility and viability of long-entrenched Western system of financial domination.
The Chinese renminbi (RMB) is the official currency of China, and it also has a digital equivalent known as the e-CNY (or Digital Currency Electronic Payment, DCEP), a central bank digital currency (CBDC) issued by the People’s Bank of China (PBOC). It is a digital version of the RMB, with its value pegged 1:1 to the physical or fiat currency.
Digital RMB (or digital yuan) transactionscan facilitate both domestic and international transactions – and much faster than SWIFT (seconds as opposed to 3 to 5 days for SWIFT), with transaction costs up to 98% cheaper than SWIFT. The digital RMB is being rolled out domestically by the People’s Bank of China and also has also been gaining traction internationally.
A major example is the “Project mBridge,” a collaborative effort involving the central banks of China, Thailand, the United Arab Emirates, Hong Kong and the Kingdom of Saudi Arabia, “to tackle some of the key inefficiencies in cross-border payments, including high costs, low speed and operational complexities.”
With Project mBridge considered a success, the use of the digital RMB cross-border settlement system has now been extended to all 10 members of the Association of South East Asian Nations (ASEAN) and 6 Middle Eastern nations, covering 38% of global trade. Further, 87% of countries worldwide are reported to have systems compatible with the digital RMB. It is thus rapidly becoming a working alternative to existing cross-border settlement systems such as SWIFT.
The Western SWIFT system (Society for Worldwide Interbank Financial Telecommunication) is a global messaging network that financial institutions use to securely exchange information and instructions for financial transactions. However SWIFT does not actually transfer funds. Instead, exchanges financial messages between banks, instructing them to transfer funds.
Due to Western control of SWIFT and its role in global financial transactions, it has been used as a tool for applying politically motivated financial sanctions, which can disrupt international financial flows to countries (- for example as part of US-led sanctions on Iran and Russia, these countries were disconnected from the SWIFT network. In addition, due to its nature SWIFT allows “transactions of interest” to be tracked and the information can be used to threaten and “pressure” countries to obey US sanctions and to “freeze” assets (i.e. facilitate Western theft of other countries assets.
Ultimately, the digital RMB cross-border settlement system is challenging the US “rules based order”, thanks to blockchain technology. Digital technologies are turning existing power dynamics on their heads, and causing the BRICS countries and many others in the Global South to question the continued utility and viability of the long-entrenched Western system of financial domination.
- Source: [Edited extract] ICT Pulse, Apr 4, 2025. https://ict-pulse.com/…/digital-rmb-vs-swift-the…/
- See also separate Video by Lena Petrova:
World Affairs in Context, Apr 9, 2025. https://youtu.be/KX_Id7J2Ee0
China Environment News 