Reply to post: Keep in mind

China's Digital Yuan not aimed at challenging US dollar, says former People’s Bank governor

Anonymous Coward
Boffin

Keep in mind

China has over a billion dollars of US treasury securities (second only to Japan). They recognize that the Yuan is not about to challenge the US Dollar.

They, among many other countries because of fluctuations in the exchange rates due to US monetary policies, have proposed that an alternative to the USD be officially adopted by the International Monetary Fund (IMF) using the currency basket (XDR) based on the IMF's Special Drawing Rights (SDR). The XDR basket consists of the following five currencies: U.S. dollar 41.73%, euro 30.93%, renminbi (Chinese yuan) 10.92%, Japanese yen 8.33%, British pound 8.09%. So even if it was adopted the Yuan would still be a minor player.

The digital Yuan is not an international power play as much as it is an internally focused step. It will allow the government to better monitor its citizens and it will also facilitate commerce within China.

IMO, basically it's closest Western equivalent would be a debit card issued by the central bank.

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