China urges the expansion of the use of the digital yuan beyond the retail to challenge the US dollar Stablecoins
China increases its efforts to strengthen digital yuan. It aims to challenge Stablecoins in US dollars in world trade.
According to the hadith a report By Chinese media, the Chinese Communist Party is concerned about the United States’ growing interest in the development of Stablecoin.
The report of the Deputy Director of the National Finance and Development Laboratory (NFDL) alerted that the United States has the possibility to reshape global financial markets. Therefore, China accelerates the accreditation of CBDC, the digital currency of the Chinese Central Bank, to compete evenly with the American Stablecoins.
China says US Stablecoins is a financial threat.
Put the last report on three types of digital assets. These three groups include Bitcoin and Stablecoins represented by USDT and USDC. The third category is CBDC, which is represented by RMB (E-CNY).
The report says: “The nature of Bitcoin is not a real currency but it is strange financial assets, which has an investment value itself,” the report says. It also explains the dual nature of digital assets.
Due to high price fluctuations, it is one of the risky assets. Despite its fluctuations, Bitcoin has shown a tendency to refer to the US dollar exchange rate, so some investors see Bitcoin as a hedge against fluctuations in traditional currencies, especially the US dollar.
The report added that Stablecoins may have a greater impact on the international financing system among the three categories. This is because Stablecoins depends on sovereign currencies and has similar financial properties.
Therefore, American Stablecoins is supported in dollars and takes advantage of its stability. This means that Stablecoins shares the same level of acceptance for international investors.
This emphasizes the fact that the Stablecoin market has across the ceiling of a market worth $ 200 billion this year.
For this reason, Chinese leaders insist that the time has come for the development of the digital yuan to match the competition.
China must expand the range of digital yuan outside the retail
China was the first country to launch CBDC. However, the government has kept the transactions limited to the retail sector only. The report says that if China wants CBDC to compete with the American Stablecoins, it must expand the use of its digital currency beyond consumer purchases.
In particular, the report talks about the expansion of the Yuan Digital Exchange “from M0 (Cash) to M1 (Cash Plus Demorits) to M2 (Cash Plus) as soon as possible. This will enable the digital yuan to be widely acceptable in the local and foreign markets.
The report also calls for China to have a stable digital currency and urges a total increase in the use of digital symbols on online platforms. Moreover, it also pushes the smooth use of the digital yuan with global applications.
Recently, the European Central Bank also addressed the necessity of Euro Stablecoins. “The digital euro will provide a safe and global acceptable option under European governance, which reduces dependence on foreign service providers,” Senior economist Philip Lin said during a speech.
He also discussed technology giants such as Apple Pay, Google Pay and Paypal dominant on digital payments in Europe. These indications are that Europe is losing the financial independence of US -based companies. His statement was followed by Michael Sailor’s publication, who said, “EUR will need BTC”.
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