Could China’s Cryptocurrency Challenge Bitcoin and Replace U.S Dollar?
- More than five years in the making of the world’s first sovereign digital currency – Yuan, slowly equips to replace physical legal tender.
- According to some experts, the new digital currency Yuan could pose a serious threat to U.S assets. They have remained unchallenged for decades.
- These recent Chinese manoeuvres have instantly triggered concerns about a new threat to American financial dominance and security.
A senior researcher of Digital Finance Research Centre with Peking University, Xu Yuan was seen quoting to the South China Morning Post that, ‘looking back years later, the two defining historic events of 2020 would be the coronavirus pandemic, and the other would be (China’s) cryptocurrency,”. So it can be rightfully assumed that China is aiming at world supremacy of monetary units. It won’t shy away from likely becoming a central integral element of the digital world economy.
Major initiatives in China’s digital currency industry
There is a complete ban on the trading of the traditional cryptocurrency units such as Bitcoin, Ethereum, Litecoin, etc. in more than 100 exchanges in the country since 2017.
More than five years in the making of the world’s first sovereign digital currency – Yuan, slowly equips to replace physical legal tender. General Chinese consumers have surpassed the use of both credit cards and computers and have embraced mobile payment apps. This could be an explanation of why China wants to convert it’s monetary transfers to virtual currency. As it could largely diminish the lack of disclosure and information about the value of their assets in banking.
China’s cryptocurrency linkage will be with the consumer’s smartphone. They would be able to transfer funds between accounts with a single tap. Thus likely diminishing the use of cash more.
There has been a limited rollout in several Chinese cities. Government employees and public sector employees received a part of their payment in the form of virtual currency. However, this isn’t an official launch of the Yuan. It’s largely meant for trial purposes only.
What could this mean to the U.S dollar?
U.S. Dollars reigns the global economy and accounts for about 90% of all international transactions. This dominance over other monetary units gives the USA extensive power even in issues that have nothing to do with finance. But, according to some experts, the new digital currency Yuan could pose a serious threat to U.S assets. They have remained unchallenged for decades.
These recent Chinese manoeuvres have instantly triggered concerns about a new threat to American financial dominance and security. Some fear that these new Chinese monetary units could allow Iran and other countries to move money without any knowledge by Washington.