beijingwalker
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China’s digital yuan could challenge the dollar’s domination as the currency of choice in international trade this decade, fintech expert predicts
PUBLISHED TUE, MAR 15 20222:22 AM EDKEY POINTS
- China’s digital yuan is set to challenge the dollar’s domination as the currency of choice in international trade settlements, predicts author and financial technology consultant Richard Turrin.
- China has been ramping up efforts to roll out its central bank digital currency, and is currently far ahead in the space as compared with its global peers.
- Nations are likely to look for alternative payment systems as part of a “risk management exercise” to reduce their current dependence on the dollar, says Turrin.
“Remember, China is the largest trading country and you’re going to see digital yuan slowly supplant the dollar when buying things from China,” Turrin told CNBC’s “Squawk Box Asia” on Monday.
“If we go about five to 10 years out, yes the digital yuan can play a significant role in reducing the dollar’s usage in international trade,” said Turrin, a former banker who has also worked in fintech.
The drive toward alternative payment systems is likely to come from a desire by nations to reduce their current, “mostly 100%” reliance on the dollar, he said.
“What you’re going to see in the future is a rollback, a risk management exercise that seeks to slowly and maybe just slightly reduce the dependence on dollar, from 100% down to 80%, 85%,” he said.
China has been ramping up efforts to roll out its central bank digital currency and is currently far ahead in the space compared with global peers.
The People’s Bank of China has been working on the digital form of its sovereign currency since 2014. Stateside, the U.S. Federal Reserve has yet to take a stand on whether to issue a digital dollar, while President Joe Biden recently called on the government to place “urgency” on the research and development of a potential digital version of the dollar.
Turin said the world’s second largest economy is currently “ahead in all financial technology by a decade.” He added the U.S. would take “easily another five years” just to get out of planning and trials for a potential digital dollar.
His comments came as China warily watches the U.S. and its allies’ strengthened alliance following the breakout of war between Russia and Ukraine. Beijing has so far deflected blame of the conflict to the U.S. and refused to term Russia’s attack an “invasion.”
Beijing, however, is unlikely to use the digital yuan to aid Moscow in bypassing the crippling sanctions imposed by the West, according to Turrin.
“The digital yuan is a baby in the sense that it is in trial but not yet launched domestically nor has it had any testing on an international basis,” Turrin explained.
On a technical level, this means it would be “extremely difficult” for China to use its CBDC to bail out Russia. He said Beijing also probably wants to shield its “new baby of a currency” from the mud on the political front.
″[China] wants eventually to have [the digital yuan] broadly accepted and making it a sanction-buster now when it’s still a baby, would not help in that goal,” Turrin said.
China's digital yuan could challenge the dollar in international trade this decade, fintech expert predicts
Nations are likely to look for alternative payment systems to reduce their current dependence on the dollar, says Richard Turrin.
, which means, even you issue "digital Yuan" but due to its strict restrictions, it will not be convertible so it can not circulate on virtual world----So the question is who would use "digital" Yuan, when the virtual currency is not convertible, and cannot circulate? 
````they are trading in millions every day!
