China Elevates Digital Yuan to Strategic Asset in Hybrid Warfare

China is weaponizing financial technology. The digital yuan and blockchain infrastructure now serve dual purposes—economic stabilization and national defense. A Central Party School study frames cryptocurrencies as tactical tools for liquidity redirection during conflicts or sanctions. "The battlefield now stretches into finance," declares the official report, signaling a paradigm shift in modern warfare.

mBridge emerges as Beijing's financial countermeasure. This cross-border CBDC network deliberately circumvents SWIFT, eroding dollar dominance. Global reserve currency shares reflect the strategy's early success—the dollar's portion declines as China's digital alternatives gain traction. Blockchain networks are explicitly categorized as "digital logistics fronts," ensuring military funding continuity during crises.

The digital yuan operates as an economic shock absorber. Its architecture maintains domestic liquidity when traditional banking systems falter under sanctions or warfare pressures. This programmable currency enables precise capital allocation—from stimulating consumer demand to financing defense mobilization—all while bypassing dollar-denominated systems.