China sets out world domination plan for its digital currency
Seeks first-mover advantage and says US dollar ripe to be dethroned
China’s central bank has laid out a digital currency world domination plan.
In an article posted to its own China Finance magazine, the Bank said that the US dollar dominates global commerce and the USA exerts great influence over the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The article says the Digital Yuan – China’s attempt to create a digital version of its currency – gives China the chance to reach its goal of challenging the US near-monopoly, because China has a first-mover advantage.
China also has the advantage of widespread acceptance of cash-free transactions, which means its populace will happily adopt a Digital Yuan.
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The article therefore calls for the Digital Yuan to be usable across borders and that by making such transactions possible China will be in a strong position to re-shape the world of global finance.
Or as the article puts it:
The issuance and circulation of digital currency will bring about tremendous changes and impacts on the existing international monetary system, clearing system, and financial system. Therefore, the right to issue and control digital currencies will become a ‘new battlefield’ for competition among sovereign nations.
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China’s issuance of legal digital currency has many advantages and faces many opportunities. It should accelerate to seize the first track, give full play to the network effect, and win the first opportunity.
While the article outlines vast ambition, remember that development of the Digital Yuan appears to be missing deadlines. And of course the rest of the world may not like China’s plans and decide not to play.
But the piece also makes mention of China’s Belt and Road initiative – an effort to build physical and digital trade infrastructure - as one reason that other nations might fancy the Digital Yuan. China is pursuing that plan with considerable enthusiasm around the world. ®