Eating BRUNCH at Taiwan 7-ELEVEN
- China embarks on a race for cryptocurrency leadership
- China’s anti-dollar ambitions
- Japan fears evolutionary isolation
China wants to create a pan-Asian digital currency and crush Libra
China proposes to create digital currency of East Asia.
It will support free trade between Japan, China and South Korea.
And most importantly, the intended currency will not depend on the US dollar..
The proposed digital currency will be based on a basket of currencies that will include the Chinese yuan, Japanese yen, South Korean won and Hong Kong dollar.
China embarks on a race for cryptocurrency leadership
Create a Pan-Asian digital currency to counter Libra In June 2019, Facebook announced preparations for the release of the Libra digital currency. The social networking project immediately attracted attention … More and the American dollar was invented in the private sector, however, the Nikkei Asian Review writes that this idea found support in the government.
The project, presented on May 21 at a meeting at the China People’s Political Consultative Conference (CPPC), involves the creation of an East Asian digital currency based on a basket of Asian currencies: the Chinese yuan, Japanese yen, South Korean won and Hong Kong dollar..
The result should be a transnational digital currency based on the upcoming “digital yuan” also known as DCEP. The shares of currencies in the basket will be determined by the economic scale of the participating countries.
For everything you need to know about central bank digital currencies, read our article.
Such a payment network could support a free trade agreement that Japan, China and South Korea are negotiating to create a trading zone independent of the dollar, Nikkei analysts say.
China’s anti-dollar ambitions
The People’s Bank of China allegedly began testing the digital yuan in four provinces including Shenzhen in April this year..
These plans were finalized last year following the announcement of the Libra launch. Initially it was assumed that it would also be pegged to a basket of currencies like a stablecoin. However, Libra would still be based on the American currency, so in the eyes of China, this coin was not much different from the digital dollar..
The inclusion of the digital yuan in the East Asia digital currency scheme would give the currency wider internationalization.
The plan has received the backing of influential political and business figures such as Neil Shen, co-founder of the Chinese tour operator Ctrip. This suggests that China is in full swing and seriously discussing regional digital currency schemes, writes Nikkei.
However, the current East Asian digital currency scheme may undergo a change..
“Proposals that accomplish DCEP’s objectives through other means will continue to be welcomed,” the experts note..
Japan fears evolutionary isolation
And most importantly, will Japan, Hong Kong and South Korea want to unite and work on a Chinese plan?
Japan may join China’s plans because its currency was left out of the latest modification of Facebook In June 2019, Facebook announced preparations for the release of the digital currency Libra. The social networking project immediately attracted attention … More.
Japan itself is testing private digital currencies and electronic payment systems, and large banks and monetary authorities are involved in various projects, the publication says. But Japan fears evolutionary isolation – creating a digital currency that no one will use. Thus, the prospect of China joining the scheme may seem very attractive to her..
Many experts agree that the era of “over-privilege” of the US dollar is drawing to a close.
David Birch, blockchain and author of The Cold Currency War: Cash and Cryptocurrencies, Hash Rates and Hegemony, believes that digital currency development is just beginning.
“This is kind of a new space race only in the world of money, because the current system is already bursting at the seams,” he told Decrypt..
The coronavirus, which exposed the shortcomings of the fiat monetary system, only accelerated these processes. It seems that an epic battle is about to unfold between the Chinese DCEP, Libra and even the cross-border digital dollar. The stakes are high and the game is worth the candle.
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