Chinese President's recent announcement regarding accelerating the use of blockchain technology followed by the passing of crypto law and the impending launch of the central bank-issued digital currency fits perfectly with China's plan of world domination.
The world's most populated country is known for being tech-centered and accelerated rapid growth and an authoritarian government like the current Communist Party of China really makes it easier for them to streamline policies and regulations. In the last decade, there has been a gradual shift of world power from West to East especially Asia, and China with its human resources and government policies are leaving no stone untouched to ensure they are at the front of becoming the next superpower.
However, the ongoing trade war and the tussle of becoming the next superpower is giving rise to a new age of digital financial ecosystem. Everyone in the government and private sector is aware of this and are using it as leverage as well. This was evident from the ongoing dilemma of Facebook with its Libra digital currency project. Libra has been at the receiving end of regulators, banks, and governments around the globe as policymakers pointed out that Libra does not share any characteristics of cryptocurrencies. Many even accused Libra of piggy riding the existing financial infrastructure which the existing institutions pay billions only in compliance fee.
Libra use the China Card
Regulators and governments around the globe started to call for libra's total ban and many European countries like France and Germany went ahead to prevent any further development of the project in their nation.
During a Congressional hearing, Facebook CEO Mark Zuckerberg insisted if the US does not approve of a universal digital currency like Libra China would take the lead. However, Zuckerberg assured that they won't go ahead with the launch unless they meet all regulatory needs.
It turned out that China was indeed closely monitoring the progress of Libra, as they accelerated their CBDC program right after the announcement of Libra and several reports have pointed out that China may launch its digital Yuan before the end of this year.
The Role of Universal Digital Currency
The US dollar is currently the king currency in the international trade market and this has given the United States unparallel powers which allows them to put sanctions on countries who are not in their good books. The ongoing trade war and the growing level of awareness and acceptance of digital currencies had opened the gates for several new opportunities including creating a borderless digital currency.
China despite being skeptical of cryptocurrencies, kept its focus on the underlying technology of blockchain. One of the main reasons for them to create a digital currency was to ensure that decentralized cryptocurrencies like Bitcoin won't foray into their financial realm.
However, the ongoing tussle to control the international trade market has given a boost to the acceptance of digital currencies.