China Uses Digital Yuan to Hit Back At Critics

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For years now, China and the U.S. have engaged in a supremacy battle. While China tries to prove dominance over the U.S., the fact remains that the U.S. has the upper hand in the global arena. However, this may not take long now that China intends to release the Digital Yuan to the worldwide market. The primary idea is to achieve great control over the global financial system, hence the move by China to introduce the Digital Yuan to the international markets. 

Insights at platforms like Yuan Pay Group indicate major competition between cryptocurrencies, including Bitcoin. With the expected launch of the Digital Yuan, there is the likelihood that the competition will be a notch higher. Aside from the expected domination of the Digital Yuan over the dollar, there will also be a significant change in the cryptocurrency industry now that China is ready to challenge the global currencies. 

Why is It Necessary? 

One of the main issues facing China is the sanctions imposed by Donald Trump against Chinese companies and officials. Notably, China is one of the United States' leading investors. However, with the previously imposed sanctions, operations across the United States have been coupled with various challenges. Companies such as Huawei were directly impacted by the sanctions, developing a bitter relationship between China and the United States. 

Currently, the focus is on challenging the United States to impose sanctions against China. The current U.S. administration has already begun vital research on how the introduction of the Digital Yuan will impact China's ability to impose sanctions. On the other hand, China has invested heavily in developing infrastructure for the Digital Yuan. And this means that China may eventually dominate the dollar, hence impacting countering sanctions from critics. 

The Underlying Challenge 

Even as China strives to implement the launch of the digital Yuan to counter the core critics, there is an underlying challenge that may negatively impact China. For example, some people view China's open boycott of H&M Shows as a significant commercial risk. And this is directly associated with companies that use Digital Yuan as a mode of payment. The more important effect may be on China once the local U.S. companies reiterate. There is the possibility that the government will prohibit and limit any transactions with H&M wallets, primarily if Digital Yuan becomes the mode of payment.

Aside from that, there is the concern that the introduction of the Digital Yuan could lead to the exposure of important information, including bank-related transaction details. With such in mind, it might be a significant challenge for U.S.-based institutions to endorse Digital Yuan as a payment medium. Only companies that have the intention to control the privacy of others will support this centralized virtual currency. Many people believe that China's first intention is to achieve financial reserves control and influence privacy among companies locally and internationally. The bottom line is that China may eventually gain control over privacy but may lose traction amidst some resistance from companies in the United States. 

Conclusion 

While it may not be easy for China to control the United States on matters of currency dominance, there is the possibility that the plan may eventually materialize. In this case, the counter impact from The United States will determine whether China will take control. The idea is to build a strong, globally accepted currency that will challenge the dollar. The ongoing research in the United States concerning Digital Yuan may counter the Chinese progress in controlling the global financial markets.