China’s New Digital Currency Spells The End for The US Dollar’s Global Dominance And Will Change The World As We Know It
- China’s New Digital Currency Spells The End for The US Dollar’s Global Dominance And Will Change The World As We Know It
by Tom Fowdy, https://www.rt.com/
The digital yuan cryptocurrency developed by China has the potential to be a gamechanger when it is rolled out fully. By ending the world’s reliance on the dollar, it will alter the geopolitical landscape forever.
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For several years now, China has been developing the digital yuan, the first cryptocurrency from a central bank and government in the world. And it’s nearing completion.
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Chinese online retailer JD recently began accepting it as a payment method as the government trials its use by giving citizens up to $3 million worth. It is also going to be used to facilitate cross-border transactions with Hong Kong. It’s set to be fully rolled out before the 2022 Winter Olympics in Beijing, which will act as a showcase.
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Many are speculating that this new currency will have global ramifications, with Facebook’s Libra executive David Marcus noting that China will create a digital currency system that can be entirely out of reach for US authorities, meaning America’s financial sanctions would have little effect. He added that if the digital yuan gets widely adopted across the world, many countries could opt for renminbi as an alternative to the dollar for international clearing and settlement services.
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So, what is a ‘digital currency’ all about and how does it work? The digital yuan will be the first national currency which will not exist in physical form, but entirely online. While currencies of old were traditionally based on something tangible – such as the gold standard – the digital yuan is built on computer engineering. This means the way it is utilized and regulated differs from a normal currency. A digital currency is more easily managed by its parent government, and more traceable and observable.
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