` Could China's Digital Currency Unseat the Dollar
Digital Yuan Currency: How can the Chinese digital currency be a threat to the US dollar




Location: Beijing

Event: Winter Olympics

Year: 2022

China wants to introduce a digital yuan currency called ERMB in 2022.

People moving to China in 2022 may have to buy or sell in this new digital currency.

It will be a currency that will not be visible and you will not be able to hold it in your hand like notes and this is not an imaginary thing.

At a time when every country in the world is struggling to cope with the corona virus epidemic, China is busy launching a pilot project on the digital yuan.

Last month, China's central bank, the People's Bank of China, began working on it in four major cities: Shenzhen, Chengdu, Suzhou and Xi'an.

Under the project, a portion of government employees' salaries will be paid in digital yuan.

In addition, 20 private companies such as Starbucks and McDonald's are participating in the experiment.

If successful, the Chinese government will release it nationwide during the 2022 Winter Olympics.

However, this will be done in phases and may take several years.

In fact, work on the project began in 2014. China is moving very fast to implement it.

There could be three main reasons for this: the escalating trade war with the United States, the continued accusations by the United States and Western countries against China over the corona virus, and the readiness to launch Facebook's digital currency this year.



Big change

The introduction of the digital yuan is said to be something that could change the global balance. It is part of China's ambitious plans to eliminate American influence and emerge as a powerful nation in the 21st century.

Experts say its successful use could lead to a new political and economic system in 10 to 15 years.


Dr. Faisal Ahmed, an expert in Chinese affairs at the Ford School of Management in Delhi, says India and the United States are working on their respective digital currencies under the names Lakshmi and Digital Dollars, respectively. But so far they are far from the truth.




US Dollars vs. Digital Currencies

Currently, the Chinese dragon has left Indian Lakshmi far behind.
But according to experts, the uncrowned king of the currency world, the dollar, is also under threat.

"The dollar is far more expensive than its original value, given the trillions of dollars in debt owed to the US Federal Reserve," says Alok Choriwala, a Mumbai-based thief. A new currency is certainly welcome, but its global acceptance will take a long time.

Parveen Vishesh is a portfolio manager at Singapore-based Modular Asset Management and trades in currencies around the world.
The US dollar is currently the world's currency and has been so since the fall of the gold standard in the early 1970s.

He adds that the escalation of the conflict due to the US-China trade war and now the Corona epidemic is a threat to the dollar. However, this change will take time due to the absence of any other and immediate alternative. The world must keep an eye on Chinese actions.

The current value of the US dollar can be gauged from the fact that in 2019, about 90% of international financial transactions were transacted in US dollars.

In comparison, the Chinese yuan accounted for only 2% of global payments and reserves.

On the other hand, more than 60% of the world's reserves are in US dollars.

India's ز 487 billion foreign exchange reserves are also in US dollars.

China's treasury also has تین 3 trillion worth of assets in US currency.

Dr. Faisal Ahmed believes that China can use it in many ways that will enhance its reputation. Can be used for investment in countries.

Currently, the effects of the US dollar and its importance mean that the United States will continue to dominate the world's political and economic affairs.


For example, sanctions against Iran, Russia, North Korea, and other countries are possible because of international trade and banks' reliance on the US dollar.

Deutsche Bank discharged an exceptional report on advanced monetary forms in late January this year, recommending that the Chinese computerized yuan could change the parity of worldwide force. 

Truth be told, if organizations working together in China are compelled to receive the advanced yuan, it could absolutely sabotage the estimation of the dollar in the worldwide monetary market. Is doing From 2000 to 2015, the portion of RMB in China's business exchanges expanded from zero to 25%. 

Deutsche Bank proposed that the computerized yuan and comparative advanced monetary standards couldn't wipe out money however could wipe out outsiders, for example, charge cards. 

"In contrast to other installment strategies, it tends to be utilized to pay without a web association," says Parveen Vishesh. It resembles genuine money, however in the advanced world. 

Be that as it may, the developing monetary standards as a power in the virtual world incorporate Facebook's Libra and the Digital Yuan, just as numerous other virtual monetary forms, and some more. 

Bitcoin as of now exists in the market and its prominence is developing. 


India has prohibited cryptographic forms of money yet the Reserve Bank is truly thinking about advanced cash Lakshmi.



Facebook Libra vs. Digital Yuan

Facebook has about 2.5 billion users, one-third of the world's population. With a population of 1.4 billion, Facebook and China have the potential to move digital currencies into the mainstream.

But the main difference between other digital currencies and the digital yuan is that China's central bank will issue the digital yuan, which will gain acceptance and increase its confidence.

All other digital currencies are decentralized and are not subject to any regulation.

"The digital yuan is a state-sponsored currency different from other currencies such as the Libra," said Dr Faisal Ahmed. It will also have political implications. The use of digital yuan, for example, will help countries like North Korea avoid US sanctions.

The idea of ​​Lakshmi, India's digital currency, came to the fore in 2014 and the talk of digital yuan started in China in the same year.

But for Indian digital currency Lakshmi, we will first have to wait for the report of several committees on the issue.


India has led to a digital revolution at the local level through the use of AEPS (Aadhaar based payment system) and UPI (Unified Payment System



Advantages and disadvantages of digital currencies

advantages are that it cannot be duplicated, transactions can be expedited, international transactions will be cheaper, everyone will be able to use them and support for referrals, smuggling and extremist activities will be stopped.

And the downside is that people won't trust it anytime soon, it won't have access to the poorest sections of the population and it will depend on the digital vault.

Experts say that as this technology develops, the benefits of digital currency will increase.

"It takes a long time to build people's confidence in any system," says Alok Choriwala. The US dollar has been around since 1770. Its popularity began to grow from the time of World War I and it became the world's best currency until World War II.

Israeli historian and analyst Yoval Noha Hariri says the currency is a myth that has worldwide significance.

Everyone trusts the dollar and everyone values ​​it.


But if US dominance in the world diminishes, another power will take its place, and China looks far ahead in the race.



2 Comments

  1. Bitcoin is market waper is good thank dear knowledge are you being share

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