![]() ![]() There’d be no more restrictions or too much political control with the Chinese CBDC.ĭigital Yuan’s transactions will be faster because it’s like Bitcoin and other cryptocurrencies. ![]() ![]() That is where the digital Yuan will kick in. Unfortunately, the US government essentially controls SWIFT. Presently, countries use the SWIFT platform to receive or make cross-border payments. It’ll help countries to evade unfair economic sanctions and conduct international trade more seamlessly. Like other cryptocurrencies, the Chinese digital Yuan has a lot to offer. What Does the Upcoming Digital Yuan Bring on Board? For instance, any mistakes the Fed makes affect everyone globally. Additionally, too much reliance on the US dollar for international trade seriously threatens various financial markets. The only problem is that the US government sometimes uses such sanctions to achieve its global political goals. While the economic sanctions cause devastating problems to the target countries, they help ensure adherence to international laws by rogue states. No government wants to do anything that could prompt the US president to impose sanctions because they know the repercussions. They can’t exercise their sovereignty fully because they’re vulnerable to US economic sanctions. For example, the over-reliance on the US dollar has landed several countries deep financial problems. The US dollar, Euro, and Japanese Yen facilitate thousands of international transactions daily.īut despite the above benefits of government-issued money, there have been numerous problems. Moreover, conventional economic systems are the most reliable due to government control. For instance, it’s one of the most secure transaction methods today. Understanding the Current US dollar-Based Financial SystemĮven though it has had some challenges, the current traditional financial system has made tremendous achievements. In addition, governments must ensure their digital currencies are immune to massive financial crises like the great depression that occurred in 2008. And while doing so, they must not repeat the same mistakes that compromised Bitcoin’s initial performance. They must speed up their projects or surrender to the digital Chinese Yuan, which has already seen the light. So the US, UK, and others still have much catching up on work. On the other hand, the Chinese version is already undergoing real-world tests and might become fully operational soon. Most countries developing central bank digital currencies are still in the research phases. While the projects are equally promising, they trail the Chinese digital Yuan project in many aspects. Other major economies, such as the UK, Japan, and the US, are also working on their CBDCs. For example, this Central Bank Digital Currency (CBDC) has been subject to transactions like payment of bus fares and train tickets.īut digital Yuan isn’t the only CBDC under development now. ![]() The digital Yuan’s development is in its final phases, with the Chinese government already putting it to various local uses. The Chinese digital Yuan is the leading one currently. Some central banks worldwide are already working on digital currencies, and China isn’t lagging. How can the Digital Yuan perform against the current US dollar-based global financial system? Well, read this piece to understand the details.
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