While there is an uncertain future for the development of the digital currency under the presidency of Joe Biden, China is leading the race.
The world is in the throes of a financial war and China is winning. China’s digital Yuan, also known as digital currency electronic payment or DCEP, will soon be used worldwide. The People’s Bank of China is one of the most advanced central banks in the world. For that reason, it has been advancing on the digital currency front, while the United States Federal Reserve appears not to have done so.
And now that Donald Trump and his “United States first” policy have been defeated, although the count is still on and court cases on the results are pending, China’s supremacy in the area of digital currency is assured.
Joe Biden has not outlined a clear technology policy, let alone a digital currency policy. This will ensure China the opportunity to increase its leadership in the digital currency race. Maintaining the US position as a global superpower is nowhere on Biden’s agenda. In 2015, as Vice President, Biden once made a toast to China:
“To the hope and expectation that 50 years from now our great-grandchildren will look back and tell the beautiful story we wrote together.
In 1979, Biden traveled to China as a junior senator after President Richard Nixon normalized U.S.-China relations. During his visit to Sichuan University as Barack Obama’s vice president in 2011, he said:
“I believed in 1979 and said so and I believe now that a rising China is a positive development, not only for the people of China, but for the United States and the world at large. A rising China will drive economic growth and prosperity and bring to the fore a new partner with whom we can tackle global challenges together.
Meanwhile, China is moving forward, launching the world’s first digital currency.
According to the announcements, the Biden and Kamala Harris administration is focusing on the coronavirus, racial equality and climate change. In their foreign policy and leadership plan, called “The Power of America’s Example: Biden’s Plan to Lead the Democratic World in Meeting the Challenges of the 21st Century”, the word “digital” does not appear once. Moreover, Biden has longstanding ties with China and has long been an advocate of its industrialisation and growth into a world leader. When asked by a National Public Radio journalist if he, as president, would maintain Trump’s tariffs on China, Biden replied with a resounding “No”.
The Chinese yuan through the DCEP will become the dominant world currency. The DCEP will not only be successful because of the forward-looking PBoC, but also because of the fact that over 12 million Chinese live outside China; in fact 2.5 million live in the US. They could adopt the digital currency and spread the yuan worldwide.
With their help, the Chinese Yuan can become an international currency Bitcoin Profit. If the Chinese Yuan is used by these people all over the world, the Chinese currency can surpass US monetary sovereignty.
The current situation has been made possible by the COVID-19 pandemic, which has increased dependence on digital services. As tensions rise in the United States, China could divert global influence. While the Federal Reserve has experimented with distributed accounting platforms to understand their potential benefits and trade-offs, it has apparently not made a final decision to adopt such a currency.
Federal Reserve Chairman Jerome Powell has said that the US government is not particularly concerned about speed when it comes to developing a digital central bank currency. Morgan Creek Digital co-founder Anthony Pompliano sounded the alarm on this neglected approach.
Powell explained the slow efforts of the United States:
“We have not made the decision to issue a CBDC and we believe there is still a lot of work to be done.
Powell suggested that developing a CBDC properly was more important than winning the digital currency race. Meanwhile, China is making progress. Pompliano sees this as an existential threat to the US dollar. “They are talking about, like, maybe we will create one in the next few years,” Pompliano said of Powell’s recent comments on CBDCs. “This is not a matter of the next few years. He added:
“This is something that is happening right now, and if they don’t act, the United States will fall far behind China because it all comes down to accessibility.
Pompliano said that the accessibility of a digital trust currency will determine the winner in this new frontier of financial technology. “If I’m sitting somewhere in the world and I can use the internet connection and I want a global currency, can I get a yuan, or can I get the dollar?
Pomp is right. The relevance of the US dollar is at stake. But the time is late, perhaps too late.