China is taking a leading role by developing its own digital currency. Their e-CNY coin experienced failure during a test at the recent Beijing Winter Olympics some months ago, since so few people were able to attend. However, since then, the currency’s usage has increased, with 10% of Chinese adults having used it in some manner, according to reports. Some have predicted that, with this kind of development for the currency, it might one day overtake the US dollar as the world’s dominant reserve currency.
The e-CNY token has the ability to upend the global financial system. China is the world’s top trading nation, and many people believe that the digital yuan will gradually take over the US dollar, especially when buying items or services produced in China. The transition to a purely digital currency as a primary means of exchange hasn’t quite happened yet. China’s ongoing efforts to guarantee the long-term viability of the e-CNY crypto must succeed in order for the digital asset to entirely take over.
If this currency becomes popular, other governments may want to create their own specialized cryptocurrencies for different sorts of trade. We might even see the development of a new cryptocurrency designed for international trading only. If more governments form their own cryptocurrencies, non-government-backed cryptocurrencies may become less valuable. Will e-CNY start a worldwide crypto shakeout, or will this attempt fail?
There is also the possibility of a digital Dollar being created as the U.S. Fed grapples with high inflation and a potential recession. If American officials want to compete with China, they could be discussing a cryptocurrency as the solution to all their problems.
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