Biden administration officials are scrambling as China introduces a virtual currency
The U.S. Treasury Department, the State Department, the Federal Reserve and even the Pentagon are watching China’s actions with concern, trying to assess the consequences for America, Bloomberg wrote, citing its own sources in Washington. Officials are seriously concerned that the digital yuan could be the impetus for a long-term effort to strip the dollar of its status as the dominant reserve currency. Meanwhile, in the short term, Americans are trying to figure out whether the digital yuan can be used to circumvent US sanctions.
The People’s Bank of China has already conducted a trial issue of the digital yuan, making it the first major central bank to issue the virtual currency. A wider rollout is expected at next February’s Beijing Winter Olympics. This will give the process international exposure.
“To provide a redundant or redundant retail payment system, the central bank must activate and provide digital currency services”, – said Mu Changchun, director of the NBK’s Digital Currency Research Institute.
China’s central bank is also exploring the possibility of using the digital yuan in international payments. The issue is already being discussed with a division of the Bank for International Settlements, as well as relevant government agencies in the United Arab Emirates, Thailand and Hong Kong.
According to Bloomberg’s sources, Washington does not intend to take any measures to counter China’s ambitions at the moment. At the same time, Beijing’s plans have given new impetus to efforts to consider the creation of a digital dollar.