Richard Turrin – Financial Technology Consultant at CNBC – argued that the Chinese central bank digital currency could challenge the dominance of the American dollar this decade. Specifically, he believes the e-yuan might replace its rival as the currency of choice in international trade settlements.
Digital Yuan to Reduce the Dollar’s Usage?
The Chinese government is known for having one of the most hostile stances on private cryptocurrencies. Last year, the authorities imposed a total ban on all digital asset endeavors, while monetary organizations and payment companies were also prohibited from facilitating crypto transactions.
On the other hand, the country has an entirely different viewpoint on central bank digital currencies. Over the past several months, the most populated nation introduced numerous initiatives to popularize its e-yuan and implement it among the broader society.
According to Richard Turrin – a financial expert at CNBC – China is “ahead in all financial technology by a decade.” In his view, the US needs at least five years to launch trials for a potential digital dollar.
Keeping in mind the rapid development of the e-yuan, Turrin said it could challenge the dollar’s supremacy and even replace it as a currency of choice when facilitating international trades:
“Remember, China is the largest trading country, and you’re going to see digital yuan slowly supplant the dollar when buying things from China. If we go about five to 10 years put, yes the digital yuan can play a significant role in reducing the dollar’s usage in international trade.”
In addition, Turin believes many countries will become less dependent on the American national currency in the years to come:
“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 the dollar, from 100% down to 80%, 85%.”
Russia Won’t Use Digital Yuan to Bypass Sanctions
CNBC’s expert also touched upon the military conflict in Ukraine and the crippling sanctions imposed on Russia.
While many countries declared economic war on Putin’s regime and implemented penalties on Russian banks and oligarchs, China has refused to do so.
According to Turrin, though, the Asian economic superpower will stay neutral in this dispute and will not provide further financial aid to Russia. Beijing will also not offer its digital yuan to Russian citizens as an escape hatch against the sanctions, concluded the financial consultant:
“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.”
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