That makes America's ability to implement sanctions on Chinese individuals and Chinese businesses much easier. Up to 75 per cent of China's foreign reserves are believed to be held in US dollar denominated assets.Īnd according to a report from the US Congressional Research Service last year, US dollars make up 90 per cent of all transactions in foreign exchange. CCP pumps millions of yuan into trials, offers incentivesĬhina's digital payment systems are considered one of the most advanced on the planet, and WeChat and Alipay dominate the mobile payment market.īoth systems allow users to pay for goods and services via a smartphone app, and the DC/EP works in a very similar way but with central bank-backed digital currency. There have also been some suggestions the nascent project could also be used, as Mr Zuckerburg predicted, to try to loosen America's grip on the global financial order. In fact, experts say it's the antithesis of the world's largest digital currency Bitcoin, because it is about increased control and regulation rather than the opposite.Īnd the DC/EP could become a new tool for the Chinese Communist Party (CCP) to monitor and control its people, and its already heavily regulated financial systems, even more. The digital yuan is not like other cryptocurrencies. Trials have been running since last year in cities across China for the new "Digital Currency Electronic Payment" (DC/EP) system – a digital yuan controlled by the central bank. Now, 18 months down the track, Facebook's plans are stalled and China has the most robust central bank digital currency (CBDC) in the world. He was giving US regulators a choice – the Facebook way or the China way.
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