China To Challenge the US Dollar

China To Challenge the US Dollar

For decades the global currency has been the US dollar. This currency is a benchmark for the current financial system. But nevertheless, China’s economic and technological development place its currency, the yuan, as a competitor that could dethrone the dollar.

According to CNN Business, China wants to dominate the global financial system and make an impact on how people consume and spend their money. To achieve this, Asians are already working on a digital currency that can have sufficient scope to impact the economic system of all countries.

China has developed tests and is assessing the effectiveness of implementing a digital version of the yuan. At the moment, this monetary system is already in operation in four cities, where transactions for a total of $ 300 million dollars have already been carried out.

If the digital yuan spreads across the country, China will become the most powerful economy by boosting a digital currency. According to various economists, this would represent a strategic positioning that would surpass an eventual digital version of the euro from the European Central Bank.

The positioning of the digital currency has not only been limited to its implementation in four cities, work is already underway to promote it in other regions of the nation. In the country’s capital, Beijing, there is already talk of its benefits, highlighting that all kinds of purchases can be made quickly and safely.

OAlthough China’s plan may be attractive on paper, reality dictates that the yuan accounts for 4% of international transactions, according to the Bank for International Settlements. The US dollar is 88% positioned, which makes it still the main currency in the world.

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