Can we really dethrone the dollar from its status as an international reserve value? The enemies of the United States dream of ending the hegemony of the greenback. China is leading the race for CBDCs. Will Uncle Sam finally make up his mind to react?
China rules the crypto industry
In an article from November 23, 2020, the Washington Examiner indicated that the director of theUS National Intelligence, John ratcliffe, reportedly contacted the administrator of the SEC, Jay clayton, to express his concerns about the progress of the digital yuan.
This project started in 2014 when the governor of the People’s Bank of China, Xiaochuan Zhu, created the Digital Currency Research Institute.
For their part, United States have opted for a cautious approach: the governor of US Federal Reserve (FED), Jerome Powell, had insisted on the need to formulate the best strategy rather than taking the first place on the podium in the race for CBDC.
Control of China cryptocurrency mining industry also worries officials of theUS National Intelligence. The country’s geographical environment is particularly favorable for mining, especially during the rainy season.
Ratcliffe reportedly stressed the importance of supporting U.S. crypto companies to gain competitiveness.
China Finance Magazine described the world of digital currencies as the new economic battleground.
The digital yuan at the service of the Party
Since the agreements of Bretton woods From 1944, the US dollar enjoys the privileged status of an international store of value.
The majority of international transactions are denominated in dollars, although countries like China and the Russia threaten the supremacy of the dollar.
The status of the dollar allows the FED to print banknotes without fear of hyperinflation given the strong demand for the greenback outside the US borders.
The success of digital yuan could call into question the dollar’s status in international trade.
The digital yuan However, leaves with a major handicap: it is considered as a monitoring tool for Chinese Communist Party.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Would it be enough to launch a digital dollar to counter the digital yuan? So the US National Intelligence wouldn’t have to worry? The Fed will be forced to step up the pace for the digital dollar launch once China releases its crypto-yuan. Unless the Fed is blind, which is why it does not see Bitcoin (BTC) gaining more and more ground at the expense of the greenback.
Litecoin, welcome in the Silver Age