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    The digital yuan ... will it become China's tool to challenge bitcoin and domination of the US dollar?


    Many Chinese citizens are accustomed to digital payment systems, through the services of "Ali Pay", as well as the application "WeChat" on mobile, instead of carrying liquid money from the yuan

    The Chinese government has already launched a pilot program to offer a digital version of its currency. Most likely, the experience will be more extensive during the Beijing 2022 Winter Olympics
    A new tool for domination
    - There is no doubt that China is expanding in many countries of the world with its economic arms, which made observers believe that its sovereign digital currency, the "digital yuan", is a new tool for extending its influence over its financial system, and also extending it around the world.
    - Chinese digital cash is being designed to be an electronic version of traditional criticism, and it is only digitized in China through government-backed mobile wallets.
    - But when launching the digital yuan, it will be different. Financial transactions will be faster and easier than dealing with traditional money, and the expected digital currency will give Beijing a greater degree of control over the money supply.
    - The digital yuan experience program started on a small scale during April and in a limited manner, in the cities of "Shenzhen", "Sochaux" and "Cheungan", by giving the government digital money in the form of individual support.
    - When generalizing the experience of digital cash, Chinese banks will have to change the pattern of their dealings with customers and create digital credit lines, and also allow the country's banking sector to compete with two successful entities in this battle,namely "Ali Bai" from "Ali Baba" and "Wechat" from " Tencent. "
    - Payment activities by consumers via mobile applications offered by technology companies make up about 16 percent of GDP in China, compared to less than 1 percent in the United States and the United Kingdom.
    - Analysts in China expressed concern about the technology companies controlling citizens ’money and interfering with the country's financial system, which poses financial and monetary risks and challenges.
    The star of independent digital currencies such as Bitcoin and Ethereum has brightened, and with the Chinese government restricting this type of asset in recent years, it has been looking for an alternative based on the same idea. Hence, the idea of ​​a "digital yuan" was circulated.
    - In 2014, China began studying the issuance of its sovereign digital currency, and observers believe that this project is not just a new financial instrument, but that there are strong political motives behind it and a means of global leadership.
    Although it may take years for a sovereign digital currency to be introduced in a country, the Chinese moves have caused politicians in the United States to worry about the threat of American financial hegemony.

    - Academics said that China's development of a digital version of its "yuan" currency poses a great financial risk, and could help countries subject to international sanctions, such as Iran and North Korea, to circumvent the sanctions.
    - But not everyone is worried about that. There is former US Treasury Secretary Henry Paulson who believes that the digital yuan will not pose a threat to the dollar's position as a preferred global currency, indicating that even if the digital yuan spreads in daily transactions, the dollar acquires broad confidence and is valued. Goods (such as oil).

    
    





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    Item Reviewed: The digital yuan ... will it become China's tool to challenge bitcoin and domination of the US dollar? Rating: 5 Reviewed By: estabina
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