It was only a few days ago that China rebutted growing concerns that they were pushing use cases beyond China for their digital Yuan. China denounced the allegations stating that their digitalised currency will only be used within its countries.
Today, it was identified that China is now trading using their digital Yuan with the United Arab Emirates and soon, Thailand will be joining the nations in accepting the digital currency as legal tender. Source
The Biden administration has flagged significant concerns as this advancement now poses a risk in trade sanctions and enables countries the ability to circumvent them through the use of China's digital Yuan. Indicating that the US is losing ground on the control of the world economy. It is also being seen as a national security risk Source
The ability to circumvent trade sanctions poses a significant risk to global stability and puts the US directly at risk and the broader global trade sector. With the ability to watch billions of US dollars into Digital Yuan enabling countries such as North Korea access to funds tomorrow's problems start today.
With the ability of trade sanctioned countries to create digital Yuan wallets and trade amongst other nations with no checks and balances could see the potential for nuclear arms and other weapons in the hands of nations that could cause global instability.
The Largest Global Surveillance System Ever Created
What's even more alarming is that the Digital Yuan has been identified as the largest surveillance system ever created. With China Confirming every transaction, location and detail of a person's spending is tracked and monitored by the Peoples Bank of China.
The ability enables the People's Republic of China to store peoples personal details and transactions through the use of their e wallets.
China insists it is necessary to ensure money laundering and bad behaviour doesn't occur citing recent arrests at the use and trade is USDT accounting for $US30 million in sales seeing over 100 people arrested.
US senators are hitting the SEC and banking sector hard to pick up their game with some senators wanting US CBDC's operational within three months and seeking clarification on how far behind the US is in launching their own version of a CBDC.
The US already sees itself trailing behind China on the technological front and now perceives itself at risk of national security. With the recent push to develop an American CBDC senators are also requiring the token to be anonymous in nature to avoid the mass surveillance system that China has developed as it is vital to ensure people's privacy and anonymity.
The game has quickly become a race with all engines focused on restoring the US dominance in the financial sector. As more nations sign up to accept the digital Yuan it risks the stability of the global financial sector.
China is well known to manipulate their currency, even going to extremes in reducing their nations currency value to circumvent tariffs. A move that enables China to continue to perform in manufacturing but causes significant problems for their people as their currency is greatly devalued.
As a good majority of items are manufactured in China and Asian countries with low currency value the price impact isn't felt as much. However as more people sign up to accept the digital Yuan and it replaces the US dollar this will have damaging impacts on the broader economy.
It's official, the US and China are now locked in a crypto race.
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Well I don't know if I consider a CBDC as a crypto but I guess it is in the technical terms. I think the biggest issue is that China wants more control over their companies and this obviously was a reason for their actions.
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