As the world battles the COVID-19 virus, a different battle in ongoing of the financial nature and so far China is winning the war over crypto supremacy. The People’s Republic of China had earlier claimed its supremacy over blockchain and cryptocurrency on multiple occasions. Now it is all set to launch its CBDC, the digital yuan, termed as the Digital Currency Electronic Payment (DCEP) to be used all over the world. The People’s Bank of China, which is considered as one of the most advanced financial institutions has been working on perfecting the CBDC model for long, spearheading their CBDC pilot. Compared to that, the US Federal Reserve has hardly made any progress.

US Election and Change in Policy

As the recent US Presidential election put an end to Trump’s policies, it also in some way ensured and cemented the China’s crypto supremacy. President-elect Joe Biden is yet to outline a robust technology policy. Expecting a digital currency policy is still far-reaching considering the scenario in the US. This presents more opportunity in front of China, to take lead position in the race of digital currency. So far we have not seen Biden out forth his agenda of taking necessary steps to ensure that America maintains its position as the Superpower. On the other hand, China is wasting no time in launching a strong digital currency backed by the Central Bank.

Asper recent announcements, the Biden-Harris administration is focused on the coronavirus, racial equality and climate change. In its foreign policy and American leadership plan, dubbed “The Power of America’s Example: The Biden Plan for Leading the Democratic World to Meet the Challenges of the 21st Century,” there is no mention of the word digital even once. Additionally, Joe Biden has old ties with China and has been a proponent of its industrialization policy and growth into a world leader.

Projected Growth of Digital Yuan

The Chinese yuan through the DCEP is poised to become a dominant global currency against the USD. Its success not only lies in the futuristic approach of PBoC, but also because of the significant number of Chinese people living in the US and globally. More than 12 million Chinese people are spread across the outside of China with around 2.5 million living in the US. One can expect that they will adopt the digital yuan and spread it globally. With such a widespread support, the Chinese yuan has the potential to become an international currency and with its continued use across the world, the Chinese yuan will be able to surmount the monetary sovereignty of U.S.

Also Read: Joe Biden Noted Bitcoin Bear to Lead US Treasury and Plans for Former Federal Reserve Chair

The current scenario has a lot to do with the COVID-19 pandemic that has increased the dependency on digital services. With the soaring tensions in the U.S., it becomes easy for China to siphon off the global influence. While the Federal Reserve did experiment with the distributed ledger platforms in order to understand their trade-offs and potential benefits. The US Federal Reserve is yet to make a definitive decision regarding the adoption of the currency. As mentioned by the chairman of the Federal Reserve, the U.S. government is not concerned with the timeliness and speed of developing a Central Bank Digital Currency.

It was rather suggested that developing a CBDC in the correct way was more important than getting ahead in the race of digital currency. While the USA takes it’s time, China keeps marching forward, which as the experts are putting as an existential threat to the U.S. dollar.

 

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