Yuan Currency: Chinese currency threaten US $?
Yuan Currency: How can the Chinese digital currency threaten the US dollar? At a time when all countries of the world are struggling to cope with the corona virus epidemic, China is launching a pilot project on digital yuan. Last month, China's central bank, the People's Bank of China, began operating in four major cities: Shenzhen, Chengdu, Suzhou and Xian. As part of the plan, a portion of government employees' salaries will be paid in digital yuan.
Yuan Currency: How can the Chinese digital currency threaten the US dollar?
Event: Winter Olympics
Yuan Currency China wants to introduce the ERMB yuan digital currency in 2022.
In 2022, people settling in China may have to buy or sell in this new digital currency.
It will be a currency that will not be visible and you will not be able to hold it in your hand like a note and it is not an imaginary thing.
At a time when all countries of the world are struggling to cope with the corona virus epidemic, China is launching a pilot project on digital yuan.
Last month, China’s central bank, the People’s Bank of China, began operating in four major cities: Shenzhen, Chengdu, Suzhou and Xian.
As part of the plan, a portion of government employees’ salaries will be paid in digital yuan.
Yuan Currency 20 private companies
In addition, 20 private companies such as Starbucks and McDonald’s are participating in the experiment.
If successful, the Chinese government will launch it nationwide at the 2022 Winter Olympics.
However, this will be done in stages and may take several years.
In fact, work on the project began in 2014. China is moving very fast to implement it.
There could be three main reasons for this: the escalation of the trade war with the United States, the repeated allegations by the United States and the West against the Corona virus against China, and the desire to launch a currency. Digital from Facebook this year.
Yuan Currency Big change
The introduction of the digital yuan could change the global balance. It is part of China’s ambitious plans to eliminate American influence and become a powerful nation in the 21st century.
Experts say its successful use could lead to a new political and economic system in 10 to 15 years.
Dr Faisal Ahmed, an expert on Chinese affairs at the Ford School of Management in Delhi, said India and the United States were working on their respective digital currencies in the name of Lakshmi and digital dollars, respectively. But so far, they are far from the truth.
US Dollars vs. Digital Currencies
Currently, the Chinese dragon is far behind the Indian Lakshmi.
But experts say the immovable king of the currency world is also threatening the dollar.
Given the billions of dollars in debt owed to the US Federal Reserve, the dollar is far more expensive than its original value, said Alok Choriwala, a Mumbai-based thief. A new currency is certainly welcome, but its global acceptance will take time.
Parveen Vaish is a portfolio manager at Singapore-based Modular Asset Management and trades currencies around the world.
The digital yuan is a big step towards moving away from the US dollar, he said. The US dollar is now the global currency since the fall of the gold standard in the early 1970s.
He added that the US-China trade war has escalated tensions and now the Corona epidemic has threatened the dollar. However, this change will take time due to lack of any other immediate alternative. The world should keep an eye on Chinese stocks.
The current value of the US dollar
The current value of the US dollar can be gauged from the fact that in 2019, 90% of international financial transactions were in US dollars.
In comparison, the Chinese yuan represented only 2% of global payments and reserves.
In contrast, more than 60% of the world’s reserves are in US dollars.
India’s foreign exchange reserves are also in US 7 7.7 billion.
China also has 3 trillion in assets in its treasury.
Dr. Faisal Ahmed believes that China can use it in many ways that will improve its reputation.
China can use the currency to include other countries in incentive packages for geographical and political purposes, as well as in the Belt and Road (BRI) project from Central Asia to the Arctic. Did he announce? Can be used for investment in countries.
Impact of the US dollar
Currently, the impact of the US dollar and its significance means that the United States will continue to dominate the world’s political and economic affairs.
For example, sanctions against Iran, Russia, North Korea, and other countries are possible because of international trade and banks’ reliance on the US dollar.
Deutsche Bank released a special report on digital currencies in late January this year, suggesting that the Chinese digital yuan could change the balance of global power.
China with the help of its central bank, is working on a digital currency that can be used as a soft or hard power tool, the report said. In fact, if companies doing business in China are forced to adopt the digital yuan, it could certainly devalue the dollar in the global financial markets.
While the United States promoted the dollar in the early 20th century, the Chinese government is now working hard to internationalize the renminbi (“RMB, China’s official currency, the yuan”), the report said. In fact, from 2000 to 2015, the share of RMB in Chinese business transactions increased from zero to 25%.
Deutsche Bank has suggested that the digital yuan and similar digital currencies may not eliminate cash, but may eliminate third parties such as credit cards.
Unlike other payment methods, it can be used to pay without an internet connection, says Parveen Vaish. It’s like real money, but in the digital world.
The success of the digital yuan will depend on how quickly it is adopted by the public, retailers, businesses, governments and other countries, he added.
But emerging currencies as a force in the virtual world include Facebook, Libra and the digital yuan, as well as many other virtual currencies, and more.
Wikipedia already exists in the market and its popularity is growing.
India has banned cryptocurrencies, but the Reserve Bank is seriously considering Lakshmi digital currency.
Facebook Libra vs. Digital Yuan.