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The ongoing global health crisis has, without a doubt, crippled numerous economies around the world. Also, this is one of the main reasons why both the United States and China are not on the best of terms as of late. In line with this, it has been learned that the latter is opting out of the U.S.-run financial system, not to mention that reports suggest that the country’s been talking to fintech companies in developing a digital currency.
Ant, Tencent Collab
Voice of America has noted that China’s central bank recently signed “a strategic cooperation agreement” with Alibaba Group’s affiliate company – the Ant Group. This to facilitate in building a technology platform for their own digital currency.
Like the Ant Group, the multinational technology conglomerate Tencent is also in collaboration with the Beijing-based bank to develop what is dubbed as the Electronic Yuan (e-CNY).
The three have been co-developing the said digital currency for the past three years, as this information may well seem to suggest that the two companies are attempting to close ties with the Chinese central bank. This amidst the CCP’s investigation and the clampdown on anti-monopoly.
‘Complicated risk’
On the other hand, Forbes noted that moves such as this from China “presents a complicated risk landscape” for both multinational firms and foreign investors doing business with the said country. Further, it was also stated that Washington could adopt a so-called “guilt-by-association” stance whenever they evaluate foreign firms and Chinese entities connected to the CBDCs in Beijing.
It was also pointed out that although Wall Street remains optimistic about the fintech scene in China, decoupling from the country will be unavoidable since sanctions could be dropped out of nowhere. If that happens, the effects will definitely echo in many countries.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
