Beijing relies on the internationalization of its currency, bypassing the banking system of the West. The People’s Bank of China (NBK) is close to launching a digital Yuan, designed to “protect” the sovereignty of China’s currency , CNBC reported.
Mu Changchun, deputy director of the PBOC payments department, claims that the new digital currency is similar to the Libra digital currency proposed by Facebook. Beijing assures that the new cryptocurrency will be as safe as the paper notes issued by the central bank. In particular, cryptocurrency can be used on the WeChat platform, owned by Tencent, and even without an Internet connection.
According to Circle CEO Jeremy Aller, the digital Yuan is becoming “the mechanism by which Chinese currency can be used in daily operations around the world”.
“Ultimately, China will create the basis for the internationalization of the Yuan. Beijing’s proposed digital currency will be used to bypass the Western banking system, SWIFT and other institutions” – said Aller.
This is a Belgium-based Society for Worldwide Interbank Financial Telecommunications, which allows financial institutions to send and receive information on cross-border payments.
Circle Director is convinced that the digital currency will be strategic in nature – “it will allow the authorities to more easily monitor the money supply in the market, as well as fight corruption and money laundering.”
The share of the US dollar, which is currently the world’s “reserve currency”, accounts for 58% of all the world’s foreign exchange reserves, the IMF said. Only about 40% of world debts are denominated in US currency.