China is not intimidated if the digital dollar is introduced because it is confident there will be no impact on its monetary policy.
Director of the People’s Bank of China (PBOC) Digital Currency Initiative, Mu Changchun, explained that the central bank has already developed a multilateral central bank digital currency (CBDC) platform that supports cross -border payments; various currencies; including various jurisdictions.
Not only that, the PBOC has also put in place strict capital management to ensure the sustainability of e-CNY from the impact of dollarization.
For the record, China is currently actively promoting the digital yuan through the Beijing Winter Olympics among its athletes and diplomats.
This means, two payment methods were introduced and accepted throughout the event: 1/ via e-CNY users, and 2/ via Visa-sponsored Olympic Games credit cards.
The digital yuan is still going through a testing phase and is expected to launch this year, making the CBDC one of the world’s first largest central banks.
It is understood that so far about 100 central banks around the world are exploring the advantages of CBDC and one of them is Malaysia.
While the United States (US) is seen lagging behind when compared to the efforts of the central bank ‘the big 4’ - the European Union (EU), Japan, and the United Kingdom (UK).
The US has previously warned its athletes participating in the Beijing Winter Olympics not to accept digital yuan for fear of espionage.
Since last year, the country led by Joe Biden has not been happy with the presence of the digital yuan. Not sure why, but the US chose not to rush into winning this race.
