The Digital Yuan and the New Geography of Monetary Power

Summary

The episode examines how China’s digital yuan (e‑yuan) reshapes the internationalization of the renminbi by focusing on usage rather than ownership. It explains that traditional barriers were convertibility and capital controls, which limited the ability to sell or move RMB assets abroad. By embedding interest‑bearing balances into a predictable digital infrastructure, the People’s Bank of China aims to reduce duration risk and keep liquidity within trade corridors without granting full convertibility. The discussion highlights the geopolitical implications of this approach, suggesting the digital yuan won’t replace the dollar but could diminish its dominance in specific corridors.