We all know digital currencies and crypto assets are gaining higher momentum and extensive adoption. Many countries have an intense competition to cope with cryptocurrencies. If we see the broader picture, then China is the one who is leading the contest regarding digital currencies. Many market experts are considering the plan for China’s digital currency a very progressive and incredible step that other countries will have to follow in the future. You might not know, but the European Central Bank has also announced that they plan to launch its pilot program in the upcoming 2 years. The United States is the biggest worry because the digital Yuan has the power to pose a significant threat to the dominance caused by the dollar. You can go through the official website of Yuan Pay Group if you want to start trading digital Yuan.
Impact of digital Yuan on other countries
- Sinophobia is the one thing that defines the anti-Chinese sentiment. It is behavior that is anti against China as well as its culture. The COVID pandemic has triggered a new kind of xenophobia. As per historians, American xenophobia began in 1880 when the Chinese exclusion act was conceded. This commandment expelled Chinese emigrants from the United States. Donald Trump, the president of the United States, constantly accused China of the covid-19 pandemic, further worsening the situation.
- The worse relations between China and the US are always the topic of media. According to a recent report by the pew research center, 73% of Americans don’t have a favorable point of view on China. In 2018, the ratio was only 47%. It signifies that sinophobia is there at the general level as well as the government level. The digital yuan currency of China is one of the prominent reasons behind the current sinophobia. This digital asset is giving a menace to the west. The people’s Bank of China claims that the main objective behind the digital Yuan is to reduce the transaction cost and bring more efficiency to payments. However, western countries are claiming that the real intention behind the introduction of the digital Yuan is to escalate the payment system’s authority and monitor the transaction and the users’ behavior. Chinese digital currency yuan, was under investigation for a while. Many pilot programs are already set up in the big cities.
- The citizens of the cities joined to get the 40 million digital lotteries by using two banking apps. The Chinese administration is very gratified that they will be the first cashless civilization. However, the US is anxious due to digital colonialism, and they have solid reasons for it. The digital silk road, launched in 2015, is a portion of the belt and road project of china. This project demands the Chinese company spread digital infrastructure construction in the countries participating in this project. The US government says it is an entirely wrong way of forcing the adoption of the digital Yuan, which will increase the control of the Chinese government in the Western financial system. Therefore, the US government is asking the EU regions to unrestraint the scheme. A very well-known Chinese corporation Huawei is also beneath the burden. Despite increased regulatory scrutiny from the US and the EU, this company signed 90 agreements, and almost 50 of them were with European companies.
- The chief strategy officer of the human rights foundation has stated that the evolution of the digital Yuan will bring danger to financial freedom and privacy. Digital Yuan is meant for domestic use, not international transactions, at least now. The western axis says that the dollar has an outstanding reputation as a safe currency because it is regulated by United States institutions that preserve essential freedom and human rights. The chairperson of the federal reserve board Jerome Powell said that the digitalization of the dollar would also be very useful for the world’s economy. Suppose China and Eurasian countries become more powerful financially and politically. In that case, China will emphasize expanding the use of this digital currency in many other countries. Some market experts also think the digital Yuan is an outstanding achievement indicating China’s power in financial technology. At the same time, the administration of the US considers the digital Yuan a secret weapon.