Currency internationalization and international financial centers: historical logic, evolutionary mechanisms, and implications for China

Drawing on the history of globalization, this paper examines the historical logic and evolutionary mechanisms of the mutually reinforcing and symbiotic relationship between currency internationalization and international financial centers through five representative cases. The findings indicate that this relationship is essentially characterized by mutual reinforcement between the deepening of international currency functions and the spatial expansion of international financial centers. This relationship promotes the co-evolution of currency internationalization and international financial centers through signaling effects, network effects, and synergistic effects. China’s experience shows that, although renminbi (RMB) internationalization and the development of international financial centers have undergone three stages characterized by policy support, demand-driven development, and expansion and deepening, their mutually reinforcing development still faces the challenges of a relatively weak foundation of trust in the RMB and the need for further improvement in market-oriented financial mechanisms. Accordingly, fostering the mutually reinforcing and symbiotic relationship between RMB internationalization and international financial centers requires balancing financial openness with financial security, improving the spatial configuration of a multi-tiered system of international financial centers, and leveraging the synergistic role of digital financial infrastructure in cross-border payments and market connectivity. By integrating the deepening of currency functions with the expansion of financial space, this paper develops an analytical framework that provides theoretical insights into understanding the evolution of the international financial landscape, coordinating the advancement of RMB internationalization and international financial center development in China, and promoting the high-quality development of China’s financial sector.