Based on the various research conducted, the sudden popularity of the digital Yuan has been watched closely by the Joe Biden’s administration. There are worries that the United State dollar’s supreme influence could be affected by the Chinese central bank digital currency (CBDC) and will be used to skirt penalties.
Valid sources close to this issue reported to Bloomberg that the governance is “stepping up investigation of China’s plans for their currency, digital yuan.”
The agitation is that the Chinese digital currency, Yuan, could have a huge influence on the USD’s relevance as the world’s reserve currency. The study contains series of valid information about the United States government’s stance on uprising of the digital yuan. The United States are disturbed about how it is being circulated and whether it can be of use for the circumvent sanctions.
The Treasury Department of the United States of America and other related departments are all “stepping up their actions” to understand it, according to gathered information. China is presently the leader in the CBDC race, with many active pilot projects and airdrops already performed. The currency’s contracts have surpassed millions of dollars in volume, demonstrating its utility in China’s digitization strategy.
This happens to be the issue in so many Asian countries, the country already has a powerful means of digital payment.
Several other nations, including Japan, France, and Australia, are planning on developing their own the CBDC initiatives. Russia recently revealed that a digital ruble would be tested in 2022. Even for China, however, the analysis and development process is not yet complete.
Over the previous year, governments’ attitudes toward CBDCs have shifted dramatically. International institutions including the Bank for International Settlements have also thrown their hats into the ring. However, in a world controlled by the dollar, the United States is more worried about China’s digital yuan getting more influence.
Can the United States of America keep up with China’s rate of development?
So many measures have been scheduled towards the improvement of the United States dollar-based digital currency, with United State Federal Reserve Governor Lael Brainard reflecting on it in a hearing last year.
Lael Brainard, the United State Federal Reserve Governor, talked about it in a hearing sometime last year.
On the part of the United States, the priority has been centered around getting the fundamentals right. Janet Yellen, The Treasury Secretary, has said that “it will be of great help if the central bank can focus on it” Nonetheless, the concern surrounding the digital Chinese yuan’s role is not yet so serious that officials want instant action, as it can still be studied for some time.
However, observers feel that the United States under Joe Biden’s government should be fast about it’s digital dollar plans. Former Chairman of CFTC, Christopher Giancarlo, is trying to make the plans possible and very effective. Giancarlo is presently the leader of the newly developed Digital Dollars project.