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  • Vignesh S G
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    Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

    • 2 minutes read

    China Crypto News: How the Digital Yuan Will Challenge the US Dollar

    Story Highlights
    • China is secretly working to replace the US dollar as the dominant global currency using blockchain technology and a government-controlled digital currency.

    • China has banned cryptocurrency exchanges and ICOs and has launched its own digital currency, the Digital Yuan.

    • China's efforts in blockchain and digital currency are likely to influence other countries.

    The East is increasingly unhappy with the US dollar’s dominant role in the global financial system. At the recent BRICS summit, Russia called for a new financial framework that would operate independently of the dollar. Initially, many doubted that other BRICS nations would support this idea. However, cryptocurrency expert Chirag Jetani recently revealed that China has been quietly pursuing a strategy to counter the US dollar’s power for several years.

    Interested in learning more about China’s plan? Read on!

    China’s Crypto Plans

    In 2017, China banned cryptocurrency exchanges and Initial Coin Offerings (ICOs). By 2021, it intensified its crackdown by prohibiting crypto trading and mining. Jetani claims that Chinese investors made almost $1.15 billion in profits in 2023. He believes that these bans are not aimed at destroying the crypto sector but rather at controlling it.

    In 2019, the Chinese president publicly supported blockchain development, leading to the establishment of over 500 blockchain projects that operate under government supervision today. Jetani highlighted that Alibaba, the Chinese multinational tech company known for its e-commerce and retail ventures, is a global leader in blockchain patents.

    Why Does the Digital Yuan Matter? 

    Jetani identifies the Digital Yuan, a state-controlled digital currency, as a key tool that China is preparing to use in its challenge against the US dollar. He argues that this digital currency is designed to lessen reliance on US-controlled financial systems.

    China’s Growing Influence in CBDCs

    Emphasizing that Chinaโ€™s blockchain supports 35% of the worldโ€™s CBDCs, Jetani noted that China could use its blockchain influence to shape the international digital currency market. 

    According to Jetani, transactions with Chinaโ€™s digital yuan have reached an impressive $13.8 billion, with nearly 261 million users engaged with the Chinese CBDC. He suggests that Chinaโ€™s efforts to promote CBDCs could encourage other nations to rethink their positions within the global digital currency ecosystem.

    A Surge in Digital Yuan Transactions

    According to Jetani, transactions with Chinaโ€™s digital yuan have reached an impressive $13.8 billion, with nearly 261 million users engaged with the Chinese CBDC. He suggests that Chinaโ€™s efforts to promote CBDCs could encourage other nations to rethink their positions within the global digital currency ecosystem.

    Jetani noted that the US Federal Reserve’s launch of FedNowโ€”a service enabling instant money transfers for individuals and businessesโ€”illustrates the impact of China’s push for CBDCs.

    In summary, Chinaโ€™s efforts around blockchain and the Digital Yuan reveal its aggressive strategy for financial dominance that goes beyond simply challenging the US dollar.

    China’s move is bold and strategic. Do you think it will succeed in challenging the US dollar’s dominance?

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