On June 17, 2026, Pan Gongsheng, governor of the People's Bank of China (PBOC), announced that six banks have been authorized to conduct offshore yuan transactions in the Shanghai Free Trade Zone (FTZ). This move aims to promote offshore yuan business in Shanghai and support the internationalization of the Chinese currency.
According to Pan, the initiative is part of broader efforts to expand the yuan's global use while maintaining vigilance against financial risks. The PBOC has emphasized the importance of a stable financial system as China pushes for greater yuan adoption in international trade and investment.
The six banks, whose names were not disclosed in the announcement, will operate under the regulatory framework of the Shanghai FTZ, which serves as a testing ground for financial reforms. This development follows China's ongoing strategy to increase the yuan's role in global finance, including its inclusion in the IMF's Special Drawing Rights basket.
Pan also reiterated the need for robust risk management, stating that the PBOC will closely monitor cross-border capital flows to prevent financial instability. The announcement comes amid global shifts in currency dynamics, with China seeking to reduce reliance on the US dollar in international transactions.
