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China’s central bank – People’s Bank of China – began its public testing of their own digital currency dubbed the digital renminbi (digital RMB) or popularly known as the digital yuan. It is said that this digital currency has been devised to circulate in both domestic and international transactions, not to mention that it also aims to be quicker and more affordable than the usual financial transactions out there. Now that this new virtual money is out in the open, will the United States develop its own digital currency?
A digital dollar next?
This digital yuan is being deemed by many as a severe threat to the U.S., and as above-mentioned, speculations are rife that the western power could be launching a digital currency of their own.
Contrary to this, it looks like the U.S. doesn’t seem to be fazed by this as U.S. Federal Reserve Chairman Jerome Powell said that such a move from China would not prompt the U.S. to rush things in terms of creating digital money. He also added that this approach by the Chinese government would not work, explaining that the Federal Reserve’s main goal is not to speed to market but “avoiding any costly oversight” regarding digitizing the greenback, Tech H.Q. reports.
If you think the U.S. is not doing anything in making a digital dollar, think again. Forbes previously reported that the Feds, together with the M.I.T., have been conducting some research into a central bank digital currency (CBDC) via “Project Hamiton.”
Some concerns with the digital yuan
The YouTube channel of China Uncensored also touched the topic of this digital yuan and even described it as the “anti-bitcoin.” It even pointed out some of the digital currency’s concerning features.
Unlike bitcoin (BTC) that offers anonymous transactions, the digital yuan is controlled by the ruling Chinese Communist Party. What about it? Well, the party is pretty likely to see everything you’re doing with it. This despite the assurance that the Chinese central bank “will limit how it tracks individuals” through “controllable anonymity.”
- It also seems that the C.C.P. wants to control when their people would use the new digital currency. Wall Street Journal stated that “Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jumpstart.” Pretty devious.
- The digital yuan isn’t just for domestic control as the C.C.P. aims to make theirs as the global reserve currency replacing the dollar. With the U.S. dollar, its global dominance gives the government a lot of power. It’s one of the reasons why sanctions imposed by the U.S. in some countries work as intended. As for the yuan’s ambition to be the top dog, it’s a far cry from what the C.C.P. aimed for.
In line with the third bullet, instead of dethroning the dollar as the global reserve currency, China is somewhat repurposing the digital yuan on that part as they’re going to utilize the said digital currency to get around both the global financial system and the USD.
Per Bloomberg, the Chinese central bank has stated that they developed the digital yuan to “protect its monetary sovereignty after the popularity of bitcoin and other cryptocurrencies posed a threat to China’s capital account management.”
Of course, anyone who was born yesterday would believe that.
They made it not just to counter that plethora of digital tokens out there, and they devised the digital yuan to counter both the dollar and U.S. sanctions. Just imagine the countries sanctioned by the U.S. evading those prohibitions thanks to the digital RMB. Coindesk even wrote an article as to how the digital yuan “neutered” U.S. sanctions as North Korea purchased nukes through it. A pretty scary thought to ponder.
China’s central bank – People’s Bank of China – began its public testing of their own digital currency dubbed the digital renminbi (digital RMB) or popularly known as the digital yuan. It is said that this digital currency has been devised to circulate in both domestic and international transactions, not to mention that it also aims to be quicker and more affordable than the usual financial transactions out there. Now that this new virtual money is out in the open, will the United States develop its own digital currency?
A digital dollar next?
This digital yuan is being deemed by many as a serious threat to the U.S. and as above-mentioned, speculations are rife that the western power could be launching a digital currency of their own.
Contrary to this, it looks like the U.S. doesn’t seem to be fazed by this as US Federal Reserve Chairman Jerome Powell said that such a move from China will not prompt the U.S. to rush things in terms of creating digital money. He also added that this approach by the Chinese government will not work explaining that the Federal Reserve’s main goal is not speed to market, but “avoiding any costly oversight” regarding digitizing the greenback, Tech HQ reports.
If you think the U.S. is not doing anything in making a digital dollar, think again. Forbes previously reported that the Feds together with the M.I.T. have been conducting some research into a central bank digital currency (CBDC) via “Project Hamiton.”
Some concerns with the digital yuan
The YouTube channel of China Uncensored also touched the topic of this digital yuan and even described it as the “anti-bitcoin.” It even pointed out some of the digital currency’s concerning features.
·Unlike bitcoin (BTC) that offers anonymous transactions, the digital yuan is controlled by the ruling Chinese Communist Party. What about it? Well, the party is pretty likely to see everything you’re doing with it. This despite the assurance that the Chinese central bank “will limit how it tracks individuals” through “controllable anonymity.”
- It also seems that the CCP wants to control when their people would use the new digital currency. Wall Street Journal stated that “Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jumpstart.” Pretty devious to say the least.
- The digital yuan isn’t just for domestic control as the CCP aims to make theirs as the global reserve currency replacing the dollar. With the U.S. dollar, its global dominance gives the government a lot of power. It’s one of the reasons why sanctions imposed by the U.S. in some countries work as intended. As for the yuan’s ambition to be the top dog, it’s a far cry from what the CCP aimed for.
In line with the third bullet, instead of dethroning the dollar as the global reserve currency, China is somewhat repurposing the digital yuan on that part as they’re going to utilize the said digital currency to get around both the global financial system and the USD. Per Bloomberg, the Chinese central bank has stated that they developed the digital yuan to “protect its monetary sovereignty after the popularity of bitcoin and other cryptocurrencies posed a threat to China’s capital account management.”
Of course, anyone who was born yesterday would believe that. They made it not just to counter that plethora of digital tokens out there, they devised the digital yuan to counter both the dollar and U.S. sanctions. Just imagine the countries sanctioned by the U.S. evading those prohibitions thanks to the digital RMB. Coindesk even wrote an article as to how the digital yuan “neutered” U.S. sanctions as North Korea purchased nukes through it. A pretty scary thought to ponder.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
