Richard Turin, fintech advisor at CNBC, argued that Chinese central bank digital currencies could challenge the dominance of the US dollar in this decade. In particular, he believes that the e-yuan could replace its rival as the currency of choice in international trade settlements.
Digital yuan to reduce dollar use?
The Chinese government is known to have one of the most hostile stances on private cryptocurrencies. Last year, authorities imposed a complete ban on all digital asset endeavors, while monetary organizations and payment companies were also banned from facilitating crypto transactions.
Central banks, on the other hand, have a completely different view of the country on digital currencies. Over the past several months, the most populous country has taken several initiatives to popularize its e-yuan and implement it among the wider society.
According to Richard Turin, a financial expert at CNBC – China is “a decade ahead in all fintech.” In his view, the US needs at least five years to begin testing for a potential digital dollar.
Noting the rapid growth of the e-yuan, Turin said it could challenge the dominance of the dollar and even replace it as the currency of choice while facilitating international trade. :
“Remember, China is the largest trading country, and you will see the digital yuan slowly replacing the dollar when buying things from China. If we go on for about five to 10 years, then yes, the digital yuan is in international trade. could play an important role in reducing the use of the dollar.”
In addition, Turin believes that many countries will become less dependent on the US national currency in the coming years:
“What you are going to see in the future is a rollback, a risk management exercise that seeks to gradually and perhaps reduce the reliance on the dollar from 100% to 80%, 85% a little bit.”
Russia will not use the digital yuan to bypass sanctions
The CNBC expert also touched on the military conflict in Ukraine and the severe sanctions imposed on Russia.
While many countries declared economic war on Putin’s regime and imposed penalties on Russian banks and oligarchs, China refused to do so.
According to Turin, however, the Asian economic superpower will remain neutral in the dispute and will not provide further financial aid to Russia. The financial advisor concluded that Beijing would not offer its digital yuan to Russian citizens to evade sanctions:
“China wants the digital yuan to be widely accepted eventually, and making it a clearance-buster now will not help that goal.”
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