MNI BRIEF: PBOC's Pan Sees Multipolar System, SDR Reserve

The international monetary system is evolving toward a multipolar structure where several major sovereign currencies will coexist, and the International Monetary Fund's Special Drawing Rights (SDR) could emerge as a leading international currency, People’s Bank of China Governor Pan Gongsheng said Wednesday at the 2025 Lujiazui Forum.

A multipolar system would strengthen global stability by encouraging greater policy discipline among sovereign currency issuers and improving the system’s resilience, Pan said. He stressed that issuers must uphold fiscal discipline, enhance financial supervision, and pursue structural reforms. (See MNI: Beijing Pushes Yuan's Global Role As U.S Dollar Falters)

Pan noted that establishing the SDR as a reserve asset would require consensus among IMF members, along with efforts to broaden its use in trade, investment, and financing. This would include issuing SDR-denominated bonds and developing settlement systems capable of handling large-scale SDR transactions.

He highlighted growing inefficiencies in traditional cross-border payment systems and said emerging technologies are making the global financial system more efficient, secure, and inclusive. China has already developed a multi-channel, wide-coverage cross-border yuan payment and clearing network, he added.

Pan also criticised the limited reform progress at global financial institutions such as the IMF and World Bank, noting that quota and voting structures remain outdated and underrepresent emerging and developing economies, calling on the international community to address how unilateral policies by some member states undermine the governance and function of these institutions.