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The digital yuan in the shadow of dollar hegemony: rethinking asia's financial autonomy amid US-China tensions
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DOI：10.1016/j.aglobe.2025.100126.png)
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Abstract
En 中文
The intensifying US-China strategic rivalry is reshaping Asia's geopolitical economy, with significant implications for financial sovereignty and currency dynamics. This paper examines China's central bank digital currency, the digital yuan (e-CNY), as both a technological innovation and a geostrategic response to dollar hegemony. Drawing on theories of financial nationalism and monetary hierarchy, it distinguishes nominal currency control from substantive autonomy in cross-border transactions, highlighting structural vulnerabilities arising from regional reliance on the US dollar. The study argues that the e-CNY functions defensively to mitigate risks of financial containment-such as sanctions or SWIFT exclusion-and proactively as a foundation for alternative settlement infrastructures, particularly within Belt and Road Initiative networks and projects like the m-CBDC Bridge. Using a conceptual, theory-driven approach informed by recent policy developments, the paper explores how e-CNY adoption could foster regional monetary pluralism or intensify competition over standards and governance. It concludes that the digital yuan is integral to a broader transformation of Asia's financial architecture, signalling a new frontier of sovereign assertion and institutional experimentation in a bifurcating global order.
Keywords:
Digital yuan
US-China rivalry
Currency sovereignty
Financial autonomy
CBDC
Monetary hegemony
Asia
Financial nationalism
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