Chinese planners are once again taking aim at the dollar. On June 17, the governor of the People’s Bank of China unveiled a fresh blueprint to pull the world’s financial streams into the Chinese yuan, including pilot schemes for offshore yuan trading and new swap lines for central banks. Expect the usual chatter about de-dollarization to hit fever pitch ahead of the annual BRICS summit in September in New Delhi, where China and Russia are likely to push for their de-dollarization cause.

Over the past decade, Beijing has made genuine progress in building alternative financial channels across three fronts: trade settlement in yuan, the use of its CIPS mechanism for cross-border clearing and settlement, and the creation of the e-yuan as a central bank digital currency. China’s financial resilience is real, and Beijing continues to pursue its goal of preserving optionality in case its access to Western financial channels is cut off—for example, due to sanctions following an invasion of Taiwan. Yet resilience is not the same as influence; few actors willingly adopt Chinese financial tools. In finance, Beijing is learning the hard way that demand, unlike infrastructure, cannot be built to order.

Chinese planners are once again taking aim at the dollar. On June 17, the governor of the People’s Bank of China unveiled a fresh blueprint to pull the world’s financial streams into the Chinese yuan, including pilot schemes for offshore yuan trading and new swap lines for central banks. Expect the usual chatter about de-dollarization to hit fever pitch ahead of the annual BRICS summit in September in New Delhi, where China and Russia are likely to push for their de-dollarization cause.

Over the past decade, Beijing has made genuine progress in building alternative financial channels across three fronts: trade settlement in yuan, the use of its CIPS mechanism for cross-border clearing and settlement, and the creation of the e-yuan as a central bank digital currency. China’s financial resilience is real, and Beijing continues to pursue its goal of preserving optionality in case its access to Western financial channels is cut off—for example, due to sanctions following an invasion of Taiwan. Yet resilience is not the same as influence; few actors willingly adopt Chinese financial tools. In finance, Beijing is learning the hard way that demand, unlike infrastructure, cannot be built to order.

Take China’s de-dollarization drive—or renminbi internationalization, using the official Chinese term for the yuan. Beijing’s progress in the field is real: Chinese firms now settle around 30 percent of their trade in renminbi, up from virtually zero just 15 years ago. Yet measured against total global trade, renminbi use remains marginal, with fewer than 5 percent of transactions settled in the Chinese currency. In fact, renminbi use is almost exclusively confined to transactions involving at least one Chinese firm.

Two reasons help explain why Beijing cannot translate its rising global trade footprint into greater use of its currency.

Chinese capital controls are one. Beijing’s restrictions on the use of the renminbi outside China make it costly and impractical for foreign firms to source and hold the renminbi that they would need to pay Chinese suppliers. Outside China, yuan deposits stood at just $234 billion in early 2025—a rounding error compared to the $15 trillion in dollar-denominated assets outside the United States.

The second reason is that renminbi settlement relies on an inconveniently small network of clearing institutions and correspondent banks. Tackling this challenge is part of the reason why Beijing launched the Cross-Border Interbank Payment System (CIPS), a clearing and settlement scheme for transactions in renminbi, in 2015. Yet here again, China is struggling to boost the adoption of its homegrown mechanism.

For transactions in renminbi, CIPS is China’s version of what Fedwire and the Clearing House Interbank Payments System (CHIPS) are for dollar transactions and T2 (the successor to TARGET2) is for euro transactions. On paper, the data looks impressive: Chinese officials like to boast that 1,791 banks from 126 countries are part of the mechanism, with daily turnover reaching up to $105 billion at the end of 2025.

Yet scratch beneath the surface, and the gap between access and adoption appears obvious. Take the claim about the 1,791 banks in the network first. This may sound like a lot, but the reality is more mundane; just 194 banks are directly connected to CIPS, while all the others access the scheme via intermediaries. Dig in further, and it quickly appears that almost all of these 194 banks are of Chinese origin. Just two U.S. banks (Citibank and JPMorgan Chase), two Eurozone banks (BNP Paribas and Deutsche Bank), and three Japanese institutions (Mizuho, MUFG, and Sumitomo Mitsui) are part of this core group.

This distinction matters, since only those banks with direct access to CIPS can use the mechanism’s messaging services, an indispensable step for cross-border transactions. This is why around 80 percent of the transactions that go through CIPS also go through Europe-based SWIFT. That is redundancy, not independence. CIPS may not be as sanctions-proof as Beijing would like to claim.

Digital currencies form the third block of China’s financial self-sufficiency efforts. On paper, data related to the digital yuan—or e-CNY, a virtual currency that users can store on their phone wallets—look solid. Since the currency launched in 2020, 225 million individual holders of e-CNY wallets have made more than 3.3 billion transactions worth around $2.3 trillion. The People’s Bank of China grandiosely concludes that the “evolution of monetary and payment systems in the digital era is a historical inevitability.”

But once again, looking beyond the headline data unmasks the fact that demand from Chinese consumers remains modest. Flows in e-CNY amount to a mere $6 billion per day, an amount that pales in comparison with the more than $150 billion that digital giants Alipay and WeChat Pay process on a daily basis combined.

In a sure sign that slow takeup is proving frustrating, some Chinese localities are trying to boost adoption by paying the salaries of public officials in digital yuan. In January, the government also announced that accounts in e-CNY would receive interest; at a meager 0.05 percent per year, interest payments are unlikely to fuel a rush toward Beijing’s digital currency.

Outside China’s borders, the adoption of the digital yuan is also stalling. Since it was set up around 2022, the mBridge platform that clears such transactions has attracted just four members (Hong Kong, Saudi Arabia, Thailand, and the United Arab Emirates). The scheme processes an average of roughly just four payments per day for a volume of about $50 million—about 0.0005 percent of total foreign-exchange turnover.

The decision from the Bank for International Settlements to exit the project in 2024 amid controversies around its potential use for sanctions circumvention made the project toxic, weighing on global interest. Beijing keeps creating further schemes regardless: In mid-June, it announced that 26 institutions have signed up for the Cross-border e-CNY Transfer ⁠Services, or CBETS, a new round-the-clock scheme to settle transactions in digital yuan.

Perhaps the hardest bit to swallow for Chinese policymakers is that the recent rise in stablecoins—privately issued digital currencies pegged to a real-world asset such as the dollar—shows that global demand for digital money exists. The stablecoin market has grown from zero to $317 billion over the past six years, with 98 percent 99 percent of the world’s stablecoins pegged to the greenback.

Such digital coins are most popular in the very developing economies that China would like to court with the digital yuan. Goldman Sachs estimates that two-thirds of global stablecoins are held by individuals in emerging markets, which are often prone to currency instability and capital controls. The International Monetary Fund calculates that relative to GDP, stablecoin use is most widespread in Latin America and the Caribbean, followed by Africa and the Middle East.

The contrasting fortunes of the e-CNY and dollar-pegged stablecoins highlight how Beijing’s three financial bricks share a common flaw: Building instruments is one thing, but fostering demand for them is an entirely different endeavor. Absent compulsion, state push, or sanctions pressure, few users pick Chinese financial instruments. Russia is the best illustration of this: Moscow embraced the renminbi, and Russian banks joined CIPS in droves only after Western sanctions left the Kremlin with no alternative. Even then, not a single Russian bank is a direct participant in CIPS.

Chinese planners can build as many institutions, payment systems, and digital currencies as they want. They cannot decree demand. Absent a massive shock—most plausibly in the form of Western sanctions—global partners are unlikely to embrace Chinese financial channels. Beijing has built the instruments, but it is still waiting for the takers.