Central Bank Digital Currencies [CBDC] have found its way into the world. With digitalization as a primary goal, governments have been carrying out the development of these assets in full swing. With China’s digital yuan being ready to be out and about, an executive of the Asian central bank revealed several other insights into the digital yuan.
Challenging The Dollar
The supremacy and monopoly that the American dollar has gained over the decades has caused an uproar in the financial sector. Numerous countries striving to bring down America’s hold on the global financial scene, no one has managed to disrupt the country’s supremacy. However, the former governor of China’s central bank, the People’s Bank of China [PBoC], recently proposed that the digital yuan entailed the chances of dethroning the dollar.
Appearing in a recent Eurasia Forum conference, Zhou Xiaochuan pointed out that China had the ability to hinder the dollarization of the economy as it has been addressing and focusing on other topics as opposed to the G7.
While the G7 aka Group of Seven includes, Germany, Italy, Japan, Canada, UK, France as well as the US, directed their attention at Facebook’s Libra project and other crypto-related issues, China was formulating ways to limit the use of the US dollar as the most common means of exchange.
He further added,
“In China, we’ve been working very hard to push the DCEP that’s the digital currency and the electronic payment. However, the focus and the major point of our concept and the content are different from the G7 principle. We need to prevent dollarization. This is one of the major designing points of the Chinese DCEP.”
Xiaochuan stressed the fact that Asian countries had been working on making the digital yuan suitable for retail payments.
While the launch of Facebook’s crypto project is almost uncertain, China has made itself clear multiple times that it was going to soon release its CBDC, the digital yuan. More recently, the country engaged its citizens in a public giveaway in the city of Shenzen where the population was allowed to make use of the digital yuan for payment purposes. A new law accomodating CBDCs was also in works in the country.