For centuries, the Silk Road was the ultimate symbol of connectivity — a living web of merchants, caravans, and ships exchanging silk, spices, and silver. Today, that same network is evolving in ways Marco Polo could never have imagined. Instead of horses and ships, it’s fiber-optic cables, trade platforms, and central bank digital currencies (CBDCs) carrying value and information across continents. China’s digital yuan (e-CNY) is transforming Silk Road trade by enabling faster, cheaper, and more sovereign cross-border payments.
China’s Belt and Road Initiative (BRI), now in its second decade, began as a massive physical infrastructure project. Rail lines from Xi’an to Duisburg, ports in Gwadar and Piraeus, and power projects across Africa and Central Asia made headlines. But a quieter revolution is underway: digital trade corridors and new ways of moving money. At the center is the digital yuan (e-CNY), China’s state-backed digital currency, which is increasingly linked to Silk Road trade and finance.
This isn’t just a tech curiosity — it’s a potentially world-shaping shift. Global trade finance has long been dominated by the U.S. dollar, SWIFT messaging, and slow, expensive correspondent banking. But the digital yuan promises near-instant settlement, fewer intermediaries, and a direct line between China and BRI partner nations. If successful, it could reshape how companies pay for goods, finance projects, and manage risk.
The stakes are high: global cross-border payment revenues reached $250 billion in 2024, and are forecast to hit $290 billion by 2026 as digital trade accelerates (McKinsey estimates). Whoever controls the rails of that system gains not just financial returns, but geopolitical influence.
The Digital Infrastructure Behind the e-CNY Push
CIPS: China’s Settlement Backbone
At the heart of China’s strategy is the Cross-Border Interbank Payment System (CIPS) — often described as Beijing’s answer to SWIFT. It’s not an exact replacement (SWIFT is a messaging system; CIPS handles settlement), but it allows banks worldwide to clear and settle transactions in Chinese yuan.
- In 2023, CIPS processed ¥123 trillion (≈ $17.1 trillion) in transactions — a 25% jump year over year.
- As of mid-2025, more than 1,680 banks and financial institutions are connected, either directly or indirectly.
- CIPS is being woven into BRI trade flows, giving exporters, importers, and banks a yuan-friendly alternative to dollar clearing.
For BRI nations worried about sanctions risk or dollar liquidity crunches, this is a strategic safety valve.
mBridge: A Multi-CBDC Superhighway
While CIPS focuses on yuan settlement, mBridge — a multi-CBDC experiment — aims to allow different countries’ digital currencies to talk directly. It’s a partnership between China, Hong Kong, Thailand, the UAE, and, most recently, Saudi Arabia.
In trials, cross-border payments have settled in seconds rather than days, with reduced fees. Imagine a Chinese construction firm paying a Saudi supplier for steel using e-CNY that instantly converts into a digital riyal, all on a shared platform — no U.S. correspondent bank needed.
Digital Silk Road Meets Fintech
Alongside these systems, China is exporting digital trade infrastructure — e-commerce platforms, logistics tech, and payment APIs — to BRI countries. The Silk Road e-Commerce initiative now covers over 30 partner nations. In 2024, cross-border e-commerce between China and BRI countries reached ¥2.6 trillion ($363 billion) — a record high.
By embedding e-CNY directly into these platforms, China hopes to make paying in digital yuan as seamless as buying on Alibaba.
Adoption Is Real — And Accelerating
Cross-Border RMB Settlement Soars
RMB usage in cross-border trade is no longer a niche experiment:
- In Jan–Aug 2024, cross-border RMB transactions reached ¥41.6 trillion ($5.9 trillion), up 21% year over year.
- In March 2025, more than 54% of China’s cross-border settlement was in RMB, a record high worth $724.9 billion.
- Goods trade now sees 26.5% of settlements in yuan, compared to just 10% a decade ago.
This isn’t just policy talk — businesses are actually using yuan.
Digital Yuan Pilots Beyond China
Domestically, the digital yuan has been tested in over 25 cities, with transaction volumes surpassing ¥7 trillion ($986 billion). China has quietly expanded cross-border pilots to ASEAN, the Middle East, and parts of Africa. Hong Kong and UAE banks have already processed real-time trade payments using e-CNY in seconds.
However, adoption abroad is still early-stage. Many merchants still prefer Alipay, WeChat Pay, or dollar payments. Convincing foreign companies to hold or settle in e-CNY will take time — and trust.
Why It Matters for the Belt & Road
Faster, Cheaper Trade Finance
Traditional cross-border payments can take 2–5 business days and cost 2–5% in fees. With e-CNY, payments can settle in seconds at near-zero cost. For small and medium exporters in BRI countries, this could mean better cash flow and less risk.
Less Dollar Dependence, More Resilience
For countries that have faced sanctions risk or dollar shortages, e-CNY offers an alternative. Settling directly with China in yuan — without routing through U.S. banks — reduces vulnerability to external shocks.
Financing Mega-Projects
Large BRI infrastructure deals often rely on syndicated loans and complex currency swaps. If those can be denominated and settled in digital yuan, financing costs could fall and timelines could shrink — especially for energy, rail, and port projects.
Challenges That Could Slow Momentum
Despite the promise, real obstacles remain:
- Liquidity & Convertibility: Global RMB markets are still relatively shallow compared to the dollar or euro.
- Trust & Transparency: Some partners worry about potential surveillance or policy risk.
- Regulation & Compliance: Every country has different AML, KYC, and FX rules — harmonizing them is hard.
- Geopolitical Pushback: The U.S. and EU are promoting their own CBDC research and SWIFT is modernizing to remain competitive.
- Technical Resilience: Scaling to billions of transactions securely will be a stress test.
Looking Toward 2026: Key Signals to Watch
- More Central Bank Partnerships: Expect more ASEAN, African, and Gulf states to sign MOUs on e-CNY integration.
- mBridge Expansion: The platform could add the digital dirham, rupee, or ruble.
- Swap Lines & Liquidity Support: China may provide credit lines to help partners adopt e-CNY.
- Digital Yuan in Mega Contracts: Watch for energy or railway deals fully settled in e-CNY.
- Competing Systems: The digital euro, FedNow upgrades, and India’s UPI-linked CBDC could challenge China’s influence.
Conclusion
Global trade is being rewired. It’s not just containers and cargo that define the Silk Road anymore — it’s data packets and digital money moving at light speed. The digital yuan, supported by CIPS, mBridge, and new trade platforms, is China’s bold play to give BRI partners faster, cheaper, and politically safer payment options.
Yet, success isn’t guaranteed. Liquidity, trust, regulation, and geopolitical competition will shape how far and fast this goes. Still, for supply chain and procurement leaders, the message is clear: financial infrastructure is now a competitive advantage. Companies that can settle quickly, avoid FX risk, and tap new payment rails will outpace those stuck in the old correspondent model.
Mattias Knutsson, a strategic leader in global procurement and business development, has been vocal about this transition. He often reminds businesses that procurement is no longer just about “finding the best price.” It’s about anticipating how money itself moves: “In a world where value crosses borders in real time, the companies that master payment innovation will master global trade.”
The Silk Road of the future will be lined not only with ports and railways but also with digital currencies and instant settlement networks. The digital yuan may not replace the dollar overnight, but it’s already redrawing trade finance maps — and smart leaders are preparing today.
