© Reuters
Investing.com – Richard Turrin, author of Cashless, a tech analyst and former banker, says China’s future digital yuan is set to challenge the dollar’s dominance in international trade settlements over the next decade .
According to him, China’s commercial strength could allow it to impose its currency. “Remember that China is the biggest trading country and you are going to see the digital yuan slowly supplant the dollar when shopping in China,” Turrin said. “If we look ahead five to ten years, yes, the digital yuan can play an important role in reducing the use of the dollar in international trade.”
A desire for independence
The impetus towards alternative payment systems is likely to come from a desire by nations to reduce their current, “almost total” dependence on the dollar, he added.
China has stepped up its efforts to roll out its central bank digital currency and is currently far ahead in this area compared to its global counterparts. The People’s Bank of China has been working on the digital form of its sovereign currency since 2014.
In the United States, the US Federal Reserve has yet to take a position on the possible issuance of a digital dollar, while President Joe Biden recently called on the government to grant an “emergency” to research and development. of a possible digital version of the dollar.
Mr Turin said the world’s second largest economy is currently “a decade ahead in all fintech”. He added that it would take the United States “easily five more years” just to get out of the planning and testing of a possible digital dollar.
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