The race between the US and China won’t end anytime soon. With Trump back in office, it is clear that the goal is to ensure the US always leads, not just in tech but in soft power projection. So far, China has been successful in maintaining its dominance as the global factory. Meanwhile, no other country comes close to the US in policing the world.
In 2022, Russia was sanctioned and cut off from the SWIFT system after invading Ukraine. China has had its fair share of trouble following President Trump’s announcement of new tariffs. Part of the October 10th market crash of 2025 was due to these aggressive tariffs on Chinese imports.
The FT suggests that heavy tariffs on China by Trump would shrink the Chinese economy by less than 1%.
A big reason for this modest impact is that China has diversified its exports away from the US in recent years. pic.twitter.com/6pYza1aIrb
— Jostein Hauge (@haugejostein) February 17, 2025
As geopolitics shape market forces, it is not surprising that Xi Jinping, China’s president, recently stated that Beijing wants the yuan to become a global reserve currency, challenging the dominance of the greenback. Although the yuan is already a reserve currency held by some central banks, the USD is unrivaled. It is backed not just by the military but by being the main transacting currency for oil around the world.
Following this news, the Bitcoin price held steady. The digital gold is still trading below $80,000, slowing down after the hammering of last week. Sentiment remains bearish, and traders are on the sidelines, watching price action.
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China Plans To Make The Yuan A Global Reserve Currency
News of China wanting the Yuan to be a global reserve currency is nothing new. If anything, it fits into a bigger story where more and more countries are pivoting away from the USD as de-dollarization picks up steam.
President Xi Jinping is calling for a “strong” currency that will not only power global finance but also serve as a reserve currency. That means in times of uncertainty, as is currently the case, central banks could race to buy the yuan instead of the USD to shield themselves from crises.
Xi’s comments mark a shift from cautious internationalization to a move that explicitly challenges USD hegemony. To ensure this goal is achieved, and the yuan becomes a credible alternative to the greenback, China is taking a multipronged approach. The Asian superpower is, first and foremost, expanding its Cross-Border Interbank Payment System (CIPS) to take on SWIFT, the system that powers the Western financial system. If successful, countries could trade without being monitored by US banks.
A part of this push will also involve using the “e-CNY” for international trade. The central bank digital currency will be issued by the People’s Bank of China. However, since they are minted on a digital ledger, all transactions would not only be fast but also cheaper, while operating outside the USD-based system.
Interestingly, Xi Jinping is also calling for a “strong currency.” For decades, China has relied on a weaker currency to boost exports. However, this is changing. A preference for a stronger exchange rate means the yuan will be more attractive to foreign investors looking to hold Chinese assets. In turn, this will make imports cheaper for local businesses.
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How Will This Impact Bitcoin and Top Cryptos To Buy?
If the global money system starts to fracture, where does Bitcoin fit? For all we know, a reserve currency is the money governments and big banks keep in their vaults. The US dollar plays this role today. China wants the yuan to be used more often for oil, trade deals, and savings. Beijing already pushes this through trade partnerships and ideas like a China-backed stablecoin push. The goal is control. Fewer dollars mean less exposure to US policy. Nonetheless, as e-CNY finds traction, it also means the Chinese government will have more power to track all transactions.
Presently, China still controls capital flows. Money does not move freely in and out. Therefore, this will naturally limit trust from global investors even if the Yuan becomes stronger and a global reserve currency, taking on the greenback.
As long as #China has capital controls, it will be impossible for the #Yuan to become the global reserve currency.
If China decided to lift capital controls, its currency would fall (fast) as a big chunk of the M2 ($40 trillion) stuck in China would most likely run for the… pic.twitter.com/9tAaYs4lBw
— Michael Nicoletos (@mnicoletos) March 31, 2023
Meanwhile, Bitcoin lives outside government control. No central bank can print more. There will only be 21M BTC to ever circulate. That makes it different from both the dollar and the yuan. When countries compete over money, cracks appear. History shows that during currency tension, people look for neutral assets. Gold has played that role for decades. Bitcoin now joins that conversation. The ongoing Bitcoin versus gold debate sits right at the center of this shift.
If the dollar weakens over time, Bitcoin often reacts positively. We saw this when the weakening US dollar pushed investors toward hard assets. This is not a theory. It already happens. Short term, a stronger yuan does not hurt Bitcoin. It adds another competitor to the dollar, not a replacement for crypto.
Bitcoin does not need one winner. It benefits from rivalry. Long term, tighter state control works against China. The open design that powers Bitcoin appeals to people who want money that moves freely. On the other hand, capital controls often push users toward alternatives, not away from them.
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The post China Wants the Yuan to Rival the Dollar: What That Means for Bitcoin appeared first on 99Bitcoins.