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It’s Official: China’s Digital Yuan To Target US Dollar Dominance

Tim Alper
Last updated: | 1 min read

The central People’s Bank of China (PBoC) confirmed that it is ready to take center-stage on a “new battlefield” of competition between sovereign nations based on digital fiats – and claims its own new token could help break “dollar dominance.”

Source: Adobe/Dilok

The PBoC has been relatively cagey about its digital yuan project, which is already in advanced testing stages, but permitted itself a rare opportunity to discuss the importance of central bank digital currencies.

Per Reuters, the PBoC stated, in an official mouthpiece publication, that the “issuance and circulation of the [digital yuan] would bring great changes to existing international finance.”

The bank added,

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track.”

Despite recent cautionary announcements, the PBoC claimed that China needed to establish “a new payment system network to break the dollar monopoly as a key part of yuan internationalization” – with the digital yuan the cornerstone in this effort.

The bank added that “improved data feedback” from its CBDC would “help enhance monetary policy transmission,” boosting chances of a faster economic recovery from the coronavirus pandemic.

Source: The International Monetary Fund

Elsewhere, Shina reported that chief architect of China Information Fintech Chen Hong Hong told attendees at the recent China Beijing International Science and Technology Industry Expo that digital currency-compatible wallet apps would play a crucial role in allowing commercial banks to speed up the implementation, promotion and adoption of the digital yuan.

As previously reported, a software developer that develops apps for commercial banks recently became the latest company to admit it was working with the PBoC on its digital currency project.

Learn more:
Digital Yuan Will ‘Hardly Put a Dent’ in USD Dominance, Says Expert
Washington Warned: Launch Digital Fiat or Say Goodbye to USD Dominance
Fed Is In No Rush With Decision on Digital Dollar – Governor
‘Post-dollar World’ May Be Run by Digital Yuan – Analysts
How CBDCs Might Change Our Daily Payments