Chinese Digital Yuan Disrupts Global Finance with 7-Second Payments

China is rapidly advancing its use of alternative payment methods (APMs) and digital currencies, such as the digital yuan, to reduce reliance on the US dollar and challenge the dominance of traditional systems like SWIFT. The digital yuan now enables cross-border payments with transaction speeds of about 7 seconds and has connected China to 16 countries in Southeast Asia and the Middle East, potentially allowing a significant portion of global trade to bypass US dollar settlements. This shift not only threatens the effectiveness of US-led economic sanctions but also poses strategic challenges for maintaining the dollar's position as the world's reserve currency. The expansion of Chinese payment platforms into the US market has raised concerns about economic competition, censorship, and national security, especially given the lack of reciprocity for US platforms operating in China. US policymakers are being urged to closely monitor these developments, as further institutionalization of APMs among BRICS nations and the technological leap of digital currencies may signal heightened risks of economic or geopolitical conflict, particularly regarding Taiwan and the South China Sea.