China’s digital yuan is seen to compete with the US dollar which has remained the dominant currency in international trade settlements, financial technology consultant Richard Turrin believes.
MCHI is down 3.99% premarket.
Turrin noted that China remains the largest trading country, which will boost the adoption of the digital yuan when making purchases of goods from China. This is also expected to lessen the use of the dollar in international trade in the next decade.
Turrin said the shift to alternative payment systems is expected to be driven by a desire by nations to lessen their reliance in the greenback, which could be cut down to as low as 80% from the current situation of mostly 100%.
The expert also noted that China is currently “ahead in all financial technology by a decade,” and the United States would take five years just for it to be able to plan and test a potential central bank digital currency.
China has consistently been boosting its efforts to launch its own central bank digital currency, and has so far been ahead of other countries. Its central bank started working on the digital version of its currency since 2014.
Turrin noted, however, that China is not expected to utilize the digital yuan to assist Russia amid the sanctions implemented against it.