China Pushes Digital Yuan to Compete with US Dollar, Faces Challenges in Global Adoption

Economic

Cryptocurrency

Summary:

China expands the use of its digital yuan as part of its efforts to challenge the dominance of the U.S. dollar in global trade. However, currency convertibility and market access restrictions remain major hurdles for the yuan’s global acceptance....

Digital Yuan Gains Traction

China has been making strides in promoting the digital yuan (e-CNY) as part of its broader strategy to challenge the U.S. dollar’s dominance in international trade and finance. The People's Bank of China introduced the e-CNY in 2019, and it has since gained traction, particularly in cities within China where it is used for a variety of transactions, including paying civil servants' wages. By July 2024, over 7.3 trillion yuan worth of transactions had taken place using the e-CNY in pilot regions. The digital yuan is part of China’s push to strengthen its currency, which has been traditionally constrained by capital controls.

Despite these efforts, the yuan faces significant obstacles to becoming a truly global currency. A major hurdle is China's lack of full convertibility in the international market, which limits the yuan's use in cross-border transactions. The Chinese government’s strict controls over foreign exchange prevent the yuan from being freely traded, unlike currencies like the U.S. dollar or euro. While the yuan has made some inroads into global trade, accounting for 2.88% of global payments by value as of June 2025, it still lags far behind the dollar, which holds over 47% of the market share.

China Eyes Stablecoin for Greater Global Integration

China is also exploring the potential for stablecoins tied to the yuan, which could further facilitate cross-border transactions. Stablecoins are digital currencies whose value is pegged to traditional currencies like the U.S. dollar, offering greater stability compared to cryptocurrencies like Bitcoin. However, China’s move toward stablecoins is still in the early stages, and regulatory frameworks are needed to ensure their safe and seamless integration with existing financial systems.

Hong Kong, with its semi-autonomous status and financial independence, has been at the forefront of digital currency innovation. It recently introduced regulations governing stablecoins, which could pave the way for a yuan-backed stablecoin. However, for a yuan stablecoin to be issued in Hong Kong, China would need to implement specific regulations governing its use, especially in financial transactions.

Despite the growing use of digital currencies like the e-CNY and the prospect of stablecoins, the yuan’s future as a global currency remains uncertain. The lack of full financial market access and China’s continued capital controls present significant barriers to widespread global adoption. However, China’s efforts, especially through digital yuan and stablecoins, signal a concerted push to reshape the global currency landscape, positioning the yuan as a potential challenger to the U.S. dollar’s longstanding dominance in international trade and finance.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Winkelmann

Economic

Commodity

Stocks

British American Tobacco for years fought the sale of unauthorised, disposable vapes in the U.S. - the world's largest market for smoking alternatives - lobbying lawmakers and arguing aggressively in court that they were illegal.But with rivals eschewing government licences and the market now worth billions, it's preparing a U-turn."Not having access to this world weighs on our company's bottom line," Luis Pinto, spokesman for BAT's U.S. unit Reynolds American, told Reuters as it prepared to test launch its first new disposable product in the United States since an influx of unregulated rivals hammered its sales.

Reynolds' disposable vape brand Vuse One uses laboratory-produced synthetic nicotine and has an application pending with the U.S. Food and Drug Administration. Pilot sales will start in late September or early October, Pinto told Reuters exclusively.Campaigners, however, accuse the company of putting profits above public health. And the FDA, which regulates nicotine products, told Reuters that going to market without an FDA licence, as BAT intends to do, would break the law.

"All new tobacco products ... that are on the U.S. market without the statutorily required premarket authorisation from the FDA are marketed unlawfully," it said.The agency did not comment specifically on BAT's strategy when asked by Reuters, but it said a pending application did not create a "legal safe harbour to sell a product."Pinto said BAT was not adding to the illegal market and its approach would differ to unauthorised rivals: its products have been subject to due diligence, will be sold via large national retailers and their features and marketing will follow stricter policies.

"It's not about, if you can't beat them, join them," he said.

Public health authorities and researchers are divided over how to weigh the potential benefits of vaping - mainly helping smokers switch away from cancer-causing cigarettes - against risks, including underage use.Booming sales of unregulated disposable vapes, often produced by Chinese companies, have exacerbated divisions. Some offer exceedingly high nicotine hits or flavours like "rainbow bubblegum" and "cookie butter" that critics say are targeted at youth.

The FDA is meant to assess vape products before they go to market and issue licences to those it finds to be, on the whole, beneficial to public health: reducing the burden of smoking without causing new problems, like a surge in youth sales.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Business Activity Rises for Third Consecutive Month

Eurozone businesses experienced a notable improvement in activity in August, with new orders increasing for the first time since May 2024. The HCOB Flash Eurozone Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 51.1 in August, up from 50.9 in July. This marks the third consecutive month of improvement and the highest PMI reading since May 2024. Readings above 50.0 indicate expansion, signaling positive growth in the region's economy.

The manufacturing sector showed particular strength, with its PMI rising to 50.5 from 49.8 in July, signaling a shift into expansion territory for the first time in more than three years. Manufacturing output grew at its fastest pace in nearly three-and-a-half years, with the subindex climbing to 52.3 from 50.6. On the other hand, the services sector continued to grow but at a slower pace, with its PMI slipping slightly to 50.7 from 51.0.

Germany, Europe’s largest economy, led the growth with its fastest expansion in manufacturing since March, although its services sector underperformed. In France, the downturn in services eased to a marginal decline, the smallest in a year, while other parts of the eurozone experienced softer growth.

Employment Gains Continue, Inflation Pressures Rise

Firms across the eurozone continued to hire for the sixth consecutive month, with job creation accelerating to the fastest pace since June 2024. Employment gains were mostly concentrated in services, while the manufacturing sector continued to see job cuts. Despite the positive employment trend, inflationary pressures intensified in August. Input costs rose at the sharpest rate in five months, with service sector cost inflation reaching its highest point since March. Output prices across the region also increased at the fastest pace in four months.

The increase in inflationary pressures, particularly in the services sector, may be concerning for the European Central Bank (ECB). The ECB had been hoping for slower wage growth to help curb inflation in this sector. However, despite these rising costs, inflation in service-sector selling prices remained steady, offering some relief.

ECB’s Rate Cut Decision

The European Central Bank is expected to hold off on further rate cuts until at least December, according to a Reuters poll, with no clear consensus on the future direction of the deposit rate by the end of the year. Policymakers are likely to assess the evolving economic situation and inflationary trends before making any further adjustments.

While August saw growth in the eurozone’s business activity, driven primarily by the manufacturing sector, concerns over rising inflation and slower growth in services remain. As the ECB monitors these developments, the region’s economic trajectory will depend on balancing growth with inflation management.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Daniel Carter

Political

Switzerland would offer diplomatic immunity to Russian President Vladimir Putin if he were to travel there for potential peace negotiations with Ukraine, Swiss Foreign Minister Ignazio Cassis announced Tuesday.

"We have always expressed our willingness, but of course it depends on the major powers' willingness to engage," Cassis stated, after Monday's White House announcements playing up a meeting between Putin and Zelensky soon.

But the Kremlin itself hasn't confirmed there will actually be such a meeting anytime time soon, with FM Lavrov on Wednesday signaling this could also happen in the future when each side was ready for a finalized peace deal.

The White House seems to be too out front on its 'confirmed' declarations, which aren't confirmed from the Moscow side at all. Trump seems to be pressing hard for a major diplomatic 'win' - but without all the sides being fully on board just yet.

French President Emmanuel Macron suggested Tuesday that Geneva could serve as the location for such talks, while also Italian Foreign Minister Antonio Tajani agreed in calling the Swiss city "a suitable venue."

Of course, Putin has had an International Criminal Court arrest warrant hanging over him since 2023 over alleged war crimes related to the invasion of Ukraine.

This is a similar case with Netanyahu - as both leaders have seen their travel somewhat restricted as a slew of European countries might move to arrest them. Netanyahu and Putin have been having to avoid most travel to basically anywhere in the West.

Putin had earlier in the war refrained from attending a BRICS summit in South Africa due to the ICC warrant. South Africa was feeling pressure from the ICC at the time over the possible trip.

Switzerland's FM Cassis has explained that his government reviewed the legal implications and concluded that due to its unique status and Geneva's role as the European hub for the United Nations, it has the ability to host a summit which would be for the sake of peace and not move on the arrest warrant.

Source: Zero Hedge

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Economic

Forex

British businesses are having their strongest month in a year thanks to a rebound in the dominant services sector, according to a survey published on Thursday.

The preliminary reading of the S&P Global UK Composite Purchasing Managers' Index (PMI) for August is likely to be welcome news for finance minister Rachel Reeves, but its suggestion of stronger inflation pressure might worry the Bank of England.

The PMI, covering manufacturing as well as services, picked up to 53.0 - its highest since August last year - from a final reading of 51.5 in July.

A Reuters poll had forecast only a small increase to 51.6.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the survey suggested the pace of economic growth had accelerated over the summer after a sluggish spring.

"It's evident from survey measures of order books, however, that the demand environment remains both uneven and fragile," Williamson said.

"Companies report concerns over the impact of recent government policy changes, as well as unease emanating from broader geopolitical uncertainty," he added.

The PMI for the services sector rose to 53.6 from July's 51.8.

But the manufacturing PMI weakened to 47.3 from 48.0, further below the 50.0 growth threshold and its lowest in three months as factories took a hit from the global trade war led by U.S. President Donald Trump.

Companies across both sectors shed jobs, albeit less quickly than in July. Firms reported higher labour costs after Reeves raised payroll taxes for employers in April when a sharp increase in the minimum wage also took place.

Complicating the picture for the BoE, services firms increased prices at the fastest pace in three months.

The central bank is trying to work out whether it can stick to its pace of one quarter-point interest rate cut every three months while inflation pressures are mounting.

Thursday's PMI survey showed business activity expectations for the year ahead were the highest since October 2024.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

ING

Economic

Forex

The small increase in the composite PMI from 50.9 to 51.1 indicates that the eurozone economy continues to weather global storms quite well. Improvements in new orders and increased hiring add to a picture of accelerating growth, but a muted pace seems likely given significant downside risks to the outlook.

Eurozone manufacturing data has jumped around in response to US tariffs, particularly concerning pharmaceuticals. Production plunged in June, but the PMI suggests that things are on the up for industry. The manufacturing output PMI jumped from 50.6 to 52.3, which is the highest reading in more than three years.The service sector is not yet accelerating. While indicating growth, the services PMI declined from 51 to 50.7. This reveals that domestic demand remains somewhat sluggish, in line with a cautious consumer and uncertainty among businesses around the state of the economy.

But for both manufacturing and services, new orders are improving. And hiring was also up, mainly for the service sector. These are healthy signs for an economy that has been weak for some time.So overall, the PMI paints a picture of an economy not suffering too much from the trade war at this point. Some acceleration of economic growth could be in the making on the back of fading uncertainty around trade with a deal in place, but of course plenty of risks around the outlook remain.

Source: ING

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Manufacturing Leads Growth Amid Strong Orders

Germany’s economy saw a modest uptick in growth in August, driven primarily by the manufacturing sector, according to the HCOB Flash Germany Composite Purchasing Managers Index (PMI). The PMI rose to 50.9 in August from 50.6 in July, marking a five-month high and surpassing analysts' expectations. A reading above 50 signals growth, indicating that the economy is expanding, albeit at a modest pace.

The manufacturing sector led the way, with its output index climbing to 52.6, up from 50.6 in July, reaching the highest level in 41 months. This growth was bolstered by a solid increase in new orders, which grew at the fastest rate since March 2022, although export sales saw a slight decline. The expansion in manufacturing suggests resilience in the face of challenges such as global trade tensions and geopolitical uncertainty.

Services Sector Shows Signs of Stagnation

In contrast, the services sector showed weaker performance, with its business activity index falling to 50.1 from 50.6, signaling near-stagnant growth. The services sector's slowdown is a concern, as it typically represents a significant portion of Germany's economic activity.

Employment trends remained a challenge, with job cuts in the manufacturing sector outweighing the slight increase in hiring within services. Employment has been on a downward trajectory since June last year, adding to the challenges facing the German labor market.

The rise in input costs and output prices in August marked a reversal from the previous month’s declines. The increase in input prices was notably driven by the services sector, likely due to rising wages, indicating upward pressure on costs in the economy.

Resilience Amid Economic Headwinds

Despite these mixed signals, the overall growth in August indicates that Germany’s economy is showing resilience, especially in manufacturing. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that Germany has managed to grow throughout the summer, with a slight pickup in the pace of expansion, considering the ongoing challenges like U.S. tariffs, geopolitical uncertainty, and relatively high long-term interest rates.

While Germany's economic growth remains modest, the strength of its manufacturing sector provides some optimism. However, stagnation in services and ongoing employment challenges underscore the complexities facing the economy. Continued growth in manufacturing and a potential rebound in services will be key to sustaining positive momentum in the coming months.