BEIJING: China gives a stern blow to the dollar hegemony in the World withlaunch of ‘first pilot program trial’.
China has commenced its ‘first pilot program trial’ of its state-rundigital currency in four major cities which is said to further thedevelopment of RMB-based trade settlement system ‘designed to counterdollar weaponisation’.
The trail payments were started in four cities including Shenzhen, Suzhou,Chengdu and Xiong’an since mid-April. According to reports, some areasgoing to host the upcoming events of 2022 Beijing Winter Olympics will alsouse the sovereign digital currency which would be the first-ever system tobe operated by a major economy.
A report published by China Dailylinkstatedthat the digital currency was formally adopted into the monetary systemwith part of the government and state-sectors’ salaries and wages in thesefour cities paid in digital currency starting this month.
‘A sovereign digital currency provides a functional alternative to thedollar settlement system and blunts the impact of any sanctions or threatsof exclusion both at a country and company level. It may also facilitateintegration into globally traded currency markets with a reduced risk ofpolitically inspired disruption.’
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‘The stability of the Chinese yuan during the COVID-19 crisis has enhancedits appeal to many investors. These two settlement systems – US dollar andChina sovereign digital – may operate side by side or if need be, on amutually exclusive basis.’
‘The third impact of any American withdrawal from China trade andengagement is the strengthening of Belt and Road Initiative (BRI) as achampion of both free trade and trade free from the bully behavior of largenations who care little for the interests of others. The BRI is alive andwell with continued momentum to establish an alternative to trade andexchange structures dominated by protectionist Western markets.’
State-media outlet China Daily said it had been formally adopted into thecities’ monetary systems, with some government employees and publicservants to receive their salaries in the digital currency from May.
