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Last year, in April, China launched and internally tested the digital Yuan, as of November 2020 more than 4 million virtual yuan transactions had been made, for a total of 2, 000 million yuan. Its implementation was done through the People’s Bank of China, and cross-border pilot tests began, the question is whether this is a threat to the hegemony with the dollar in the world economy.
All this means the first real attempt at a coin virtual publishes in the economies of the world . Recall that the United States is also studying a digital currency, the digital dollar , about which little has been said Rather, the main idea is financial inclusion, because this virtual currency includes the unbanked population. But the truth is that China is currently ahead .
In China, after pilot tests it was shown that the issuance and distribution mechanism of the digital Yuan (called CNY) is compatible with the existing financial system . Therefore, they have created a calendar to expand its official use in more cities in the Asian country.
How can it affect the CNY to the US dollar?
Being the dollar the dominant reserve currency in the world, because it has had supremacy for decades, now the digital Yuan tries to position itself. Given the great attraction that the new currency may mean for some countries, the administration of President Joe Biden monitors closely the development and evolution of this digital Yuan, as assured by experts on the subject from Bloomberg.com.
Although China tries to dispel the fears that are emerging regarding the digital Yuan , American financial experts try to understand how the distribution of this new currency will be and study the possibility of that is used to evade sanctions from the United States government to other countries.
By his part, Li Bo of the People’s Bank of China, assures that his intention is not to replace the US dollar or any international currency, but “to allow the market to choose, to facilitate international trade and investment.” And he emphasized that cross-border use would be long-term, since now the focus of his government is “domestic use.”
However, the director of the China Institute from the University of London (SOAS), Steve Tsang, told BBC News Mundo, that the launch of the digital Yuan is a strategy of “internationalization” of the Chinese currency , a goal that can only be achieved with a digital currency. Well, to internationalize the traditional currency “China would have to allow its free trade, which the communist party will not accept because it will reduce its control.”
For Tsang, it is still early to see that the digital Yuan will replace the dollar in the world economy, however we have observed a falling behavior of the US currency in its value, in recent years and there is no denying the commercial importance of China, in addition to its ambitions.
Meanwhile, the United States does not is left behind and advances with a bill of the “digital dollar” proposed by the Democrats and that they have defined as a “unit of electronic value” that will be financed by the Federal Reserve of. And that among other things, it is expected to impact the cryptocurrency and blockchain industry.
Project that has been seen as a stimulus to the US economy and for digital currencies, as there is talk of including in this market hundreds of millions of Americans who still do not dare with cryptocurrencies.
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