The Chinese cryptocurrency is to compete with the dollar. Digital Yuan Is Coming?

Not the Euro, British Pound, Swiss Franc, Australian Dollar, or even Bitcoin. The American dollar as the most important currency in the world can be changed by the Chinese cryptocurrency. The authorities of the Middle Kingdom have such a plan. And they precisely implement it step by step.

US President Donald Trump at every opportunity (and recently even without it) emphasizes that the greatest threat to the US is not Russia, but China. He even wants to completely break off economic ties with the country, accusing its authorities of destabilizing the global economic system or suggesting that the coronavirus pandemic is related to unclear actions by the Chinese government.

On the other hand, China has huge foreign exchange reserves, mostly in US dollars. At the end of 2019 - as reported by the People's Bank of China - they amounted to an astronomical amount 3 107 924 000 000 USD. So China could quickly become a major currency market player and shake Forex market as soon as they like it, but so far the reserves have not been reached, even at a time when the Chinese economy has significantly weakened due to the coronavirus and the yuan exchange rate was unfavorable for it.

Economic war with a new weapon - cryptocurrencies

Why has the Chinese not decided to use even a part of the reserves? It seems that they have a long-term plan to dethrone the dollar. After all, the fact that for years they have been waging an economic war with the United States to be a world economic leader is undeniable.

The new "battlefield" is to be the digital currency of the Chinese central bank - CBDC. China wants to accelerate work on the introduction of CBDC, a cryptocurrency also known as the digital yuan, so as not to be left behind in the global race for the title of the first state-owned cryptocurrency. Recall that the most common is Petrowhere even pensions are paid in Venezuela, you can use it to pay taxes, and many employers have given up on fiat currencies and also pay wages in cryptocurrency. However, this is a solution dedicated mainly to the domestic market.

Chinese Cryptocurrency Patents

Chinese CBDC is to be a much more advanced project. Suffice it to say that the research unit of the People's Bank of China (PBoC) filed 130 patent applications in the field of technological solutions and cryptocurrency trading with the appropriate office only by the end of April this year. They concern, among other things, their implementation into the economic circulation, trade between individual institutions and Chinese citizens, as well as people from around the world. Therefore, CBDC is to be not only an internal means of payment, but a solution that will allow China to trade much easier with anyone from anywhere in the world.

No wonder the US president feels the threat is real. Chinese cryptocurrency would certainly be more convenient to trade internationally than the yuan. Until now, most countries or even tourists wanting to buy yuan, buy dollars first. Following the launch of CBDC, the role of the US intermediary would quickly become increasingly marginal. More and more people would not need dollars.

Trial Chinese cryptocurrency already in testing

When the Chinese talk about speeding up work, it's not about design at all. CBDC has been in operation since 2015. Currently, the digital currency is undergoing a testing phase, on a scale completely unavailable in other countries. CBDC is testing it in the largest cities: Shanghai, Beijing, Guangzhou and Hong Kong, and tests it - a trifle - 400 million people! Chinese commercial banks are also participating in the operation.

The international digital yuan test is planned for the Winter Olympics in 2022. If successful, its popularity will be hard to hold, even if regulated by the Beijing government.