Here is the Long Term Impact of the Digital Yuan – Biden Administration

Here is the Long Term Impact of the Digital Yuan – Biden Administration

Bitcoin News Blockchain
April 5, 2021 by Editor
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Did you know, according to a Bloomberg study, officials from the Treasury, State Department, Pentagon, and National Security Council are learning about the potential consequences of a digital yuan central bank digital currency (CBDC). The Bloomberg paper said that “American officials are less concerned about an imminent threat to the existing framework of the global
Digital Yuan

Did you know, according to a Bloomberg study, officials from the Treasury, State Department, Pentagon, and National Security Council are learning about the potential consequences of a digital yuan central bank digital currency (CBDC).

The Bloomberg paper said that “American officials are less concerned about an imminent threat to the existing framework of the global financial system.

But they are interested in learning how the digital yuan could be circulated and is it useful or not.”

SWIFT, the international payment messaging system, has effectively become a mechanism for imposing sanctions.

As a result, countries like China and Russia want to reduce their reliance on it.

Following up on the Bloomberg report, China already has its cross-border payment system, CIPS.

However, it relies on SWIFT for messaging at the moment. It might, however, be able to incorporate the digital yuan.

Which one will they prefer? Domestic or International Plans?

The reported goals for China’s digital currency are primarily domestic. However, it is seen as part of a larger geopolitical picture by analysts in the United States and China.

Mu Changchun, the project leader for the digital yuan, explained three motivations at a Bank for International Settlements (BIS) conference last month.

The first is to prevent cryptocurrency trading and maintain monetary sovereignty. The global stablecoin project Diem (Libra) was a significant wake-up call for many central banks.

The second reported goal was to have resiliency in retail payments, with Alipay and WeChat Pay dominating digital payments.

Suppose something goes wrong with these private payment systems. In that case, a CBDC will provide continuity, and a digital yuan will make these two wallets and others interoperable.

The third goal is to develop a more effective 24/7 payment system that is both government-controlled and private-sector integrated.

Mu Changchun, on the other hand, made a big announcement at the same event. He wants to develop some international ground rules for cross-border payments involving digital currencies issued by central banks.

CBDCs from other countries may pose a threat to China as well.

What is with Geopolitics and the Digital Yuan?

David Marcus from Facebook discussed the digital yuan. “I don’t believe it’s a domestic target for them. It’s cultivated, and it aims to rewire the financial networks of many countries with digital assets under their influence. I believe there will be a lot of projects with a more disruptive mindset,” Marcus predicted.

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