Will China’s Govt-backed Digital Yuan Drive Currency Dominance?

A growing tension amidst the trading wars and the global pandemic has revealed a new fiat investment of the Chinese government in generating its first sovereign central bank-backed digital currency.

“Digital Yuan” of China’s Central Bank. Photo:Bitcoin News

If the experiment succeeds, the crypto currency or the DCEP (Digital Currency/Electronic Payment) will not only improve the “transparency” but also proliferate the “internationalisation” of the currency to be benchmarked worldwide.

Previously, Facebook’s proposal of the issuance of “Libra” was terminated due to a loose uncertainty of consequences on the disruption of the banking system as well as a turmoil in the world economies. Due to its “unregulated payments, anonymity and transfer limits”, a renegotiation on the proposal has yet to be done.

An analyst from NTD warns of the repercussions of the digital Yuan as having stricter regimes on the Chinese consumers, providing controlled anonymity and decentralisation.

In the words of Xi Jin Ping “Chinese Renminbi is designed to supplant the bitcoin and its brethren with a system controlled by government authorities” , exerting power over individual financial activity and curbing tax evasion and terrorist financing.

While this token is to be reportedly tested in four cities of China, this “Post-Dollar World” might not just be gunning for the USD market share but also for the BTC’s (Bitcoin) market share, a bold move in the Fintech industry.

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