Digital Silk Road: between the myth of the “end of the dollar” and a new round of infrastructure competition

In this sense, the mBridge project is illustrative. It is overseen by the Bank for International Settlements and brings together regulators from Hong Kong, Thailand, the UAE, and a number of other jurisdictions. By the mid-2020s it had moved from conceptual work to a functioning prototype: wholesale central bank digital currencies make it possible to execute cross-border payments in seconds, bypassing traditional correspondent banking chains. But mBridge is only one contour. In parallel, Beijing has been methodically building up its own ecosystem: the digital yuan, the CIPS system, and since the summer of 2026 an expanded pool of financial institutions admitted to the e-CNY cross-border platform.

Watching these processes, it is hard to shake the impression that this is not a set of scattered pilots but a deliberate architectural design. Each new element—whether mBridge, CIPS, or the e-CNY cross-border platform—is integrated into an existing framework and takes on part of the load. The laboratory phase, apparently, is behind us: routine institutional work is beginning to wrap these solutions in contracts, regulations, and banking licenses.

Here it is worth recalling the classic formula that Jeffrey Frankel articulated back in the late 1990s: the status of an international currency is bought not by payment technology but by market depth. You need a huge pool of liquid Treasury bonds, an open capital account, predictable law, a network of counterparties willing to hold savings in that currency. The digital yuan, however perfect it may be, does not automatically create any of these factors. Hence the paradox: payment infrastructure can be cutting-edge while the currency remains peripheral. IMF figures confirm this: in global reserves the dollar holds about 58–59%, while the yuan barely reaches 2–3%, and this gap is not narrowing at a revolutionary pace.

A more cautious—and, it seems, more realistic—hypothesis sounds different. Digital platforms can indeed displace dollar infrastructure from certain settlement corridors. But this will happen where business logic itself pushes in that direction: in trade with China, with partners along the Belt and Road, with Persian Gulf countries, where settlements in yuan or national currencies already have an economic rationale today. But this is not equivalent to global de-dollarization. Rather, it is about fragmentation of the payment space and the emergence of parallel settlement circuits.

The main challenge to the dollar today is not that the digital yuan will take its place tomorrow. The main challenge is that international settlements are ceasing to be a neutral technical function. They are becoming part of economic sovereignty, industrial policy, and geopolitical positioning. China is consistently building not just a digital currency but a bundle: trade, banks, payment channels, the digital yuan, cross-border settlements, and technology standards.

For business, this implies a pragmatic conclusion. What matters is not loud statements about the “end of the dollar,” but specific things: in which corridors settlements in digital yuan are appearing, which banks are connecting to new platforms, which countries are testing wholesale central bank digital currencies, and how the cost, speed, and transparency of payments are changing. It is at this level that it will be decided whether the Digital Silk Road becomes a full-fledged alternative to the existing infrastructure or remains an important but limited regional instrument.

In the coming years, we will likely see not the replacement of one monetary system by another, but a more complex picture: the dollar will retain its central role in the global financial system, but alongside it specialized digital settlement networks will develop. Their significance will be determined not by slogans, but by whether they can offer businesses a cheaper, faster, and more predictable way to make cross-border payments.

Author: PhD (Economics), Associate Professor, Department of World Economy and World Finance, Financial University under the Government of the Russian Federation Elizaveta Valentinovna Ogloblina.