The issuance of the digital yuan by China seems to invite concerns of the U.S. administration especially the long -term impact of the currency as a global reserve.
According to a report from Bloomberg, several officials from various departments have already redoubled efforts to more clearly understand the possible threats by the Chinese initiative.
U.S. Treasury officials, the State Department, the Pentagon and the U.S. National Security Council, however, are less concerned about the short -term impact of the digital yuan on the dollar.
Still, it is different if it involves challenges to US global reserves for the long term. Authorities in the country have already begun studying how the digital yuan will be distributed and whether it is also useful for trade restrictions.
For the record, China began developing an electronic digital currency (DCEP) payment system involving the country’s largest banks and payment giants such as Tencent and Ant Financial in 2019.
The project has also successfully passed several tests including distributing digital angpau to residents through lotteries which can then be spent in selected shopping malls throughout China.
This effort makes China’s central bank the first major central bank to issue digital currency with DCEP as a start -up.
So, it is not surprising why the US administration has begun to panic at the success of its rival country.
