The United States is growing increasingly wary of China’s upcoming digital currency.
On November 25, the Washington examiner brought to the fore a letter sent by National Intelligence Director John Ratcliffe to the Securities and Exchange Commission. In the letter, the national intelligence boss Radcliffe was warning the SEC about the security risks of China’s CBDC would present. Ratcliffe was very concerned about China’s possible dominance in crypto mining, as well as the country’s progress in its CBDC program.
US slammed for nonchalant CBDC attitude
The letter from the National Intelligence Director also urged SEC boss Jay Clayton to ensure that US firms stayed competitive in the face of rising competition. The US has come under attack for its relaxed attitude when it comes to digital currencies and the possible development of a digital dollar. The closest the US has come to a digitized token was Facebook’s Libra which has been embattled since the idea even got out there. Firms like Ripple have threatened to leave the US because of a perceived laid back attitude even as China makes significant move in the development of its CBDC.
China threatening dollar dominance
Since the mid-40s, the United States has enjoyed the status of being the issuer of the World’s resource currency, the US dollar. The dollar has remained the base currency in international trading with most jurisdictions basing their transactions based on it. Being the world’s reserve currency gives the US Fed special leeway of printing more money without running the risk of hyperinflation because of huge demand of it overseas. A successful Chinese CBDC could challenge the status of the dollar when it comes to international trade.
If China makes headway and starts having a good number of world economies demanding the Yuan, it could change the entire global economic scene.
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