The recent imposition of hefty tariffs by the United States on Chinese goods has sparked a significant decline in the yuan’s value. As a result, China is bolstering its digital currency initiatives to demonstrate resilience and strengthen economic stability amidst geopolitical tensions. 9 months data shows a dramatic surge in e-CNY adoption – from 180 million to 800 million users and transactions rising by 45% to reach 10.2 trillion yuan. This move is strategically employed to instill public confidence in the face of economic challenges. The PBOC has taken steps like asking banks to reduce US dollar purchases. However, market sentiment remains cautious as the yuan continues to depreciate. Some economists have expressed skepticism regarding China’s optimistic outlook, highlighting potential for PR-driven manipulation. It is worth noting that China’s e-CNY faces hurdles with privacy concerns related to its reliance on digital IDs. Despite these challenges, the government continues to advance its digital currency by introducing features like offline payments and enhanced QR code functionality in various cities. While it remains to be seen if this will effectively counter the impact of the tariff war, China is clearly betting on its digital currency for a strategic economic maneuver.