The new US administration headed by President Joe Biden is closely following the rumors surrounding China about a possible digitized version of its national currency, the "Yuan". The Biden administration is primarily concerned about the potential of this digital yuan to undermine the US dollar's status as a world reserve currency.
Could the US dollar lose against the digital yuan?
According to some information (courtesy of Saleha Mohsin), the US government is concerned. The prospect of the dollar losing its status as a world reserve currency in the future is real. The dollar has been a cornerstone of the world economy for so long, that many may believe it is unlikely that it will ever be replaced. However, China has the power not only to do this, but to accomplish it sooner than many individuals might think or expect.
The biggest questions revolve around the distribution process and the digital asset used to circumvent penalties. Furthermore, it was reported that the Pentagon, the National Security Council, the State Department, the Treasury, are currently "stepping up efforts" in order to fully understand all the various facets and implications of a digital Yuan and digital currencies of the Central bank (CBDC) in general.
China actually leads the charge in terms of CBDC implementation and progress. It is easy to see that the current US administration will want to keep an eye on what is happening in China, as the country is the US's main economic competitor. China currently has a technologically sophisticated and dynamic digital payment infrastructure, which will make the implementation of a digital yuan much easier and more accessible.
The United States tries to stay in the running for CBDCs
As more and more countries open their doors to a digital currency, such as Russia, Japan, France, Australia and Sweden, China still remains the clear leader and many nations have actually modeled their own versions of their respective national currencies after the digital Yuan.
The United States, however, has said that if the country decides to introduce a digital dollar, the basics, costs and long-term benefits of such a decision must be thoroughly researched and understood before any such action is taken.
The United States has had some individuals like Christopher Giancarlo who have tried to help introduce CBDCs to the country. However, so far the current administration remains reluctant to move all-in. Meanwhile, China continues its dominance which doesn't seem to stop anytime soon.
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