China`s digital currency dominance

China`s new digital currency e-yuan is a big threat to the US dollar. E-yuan is expected to give China`s government vast new tools to monitor both its economy and its people. This is not only about the CCP`s ability to control China`s economy but also about their increasing global power, and it`s long running battle with the US dollar.

China has long said they are in war on Bitcoin. What some people don`t like is that Bitcoin is decentralized, but China`s digital currency is controlled by the CCP. In other words; the CCP can see everything you are doing with it.

Nearly 90% of foreign-exchange transactions involve dollars and more than 60% of all global central-bank reserves are held in dollar-denominated assets, and that gives the US tremendous power. But China doesn`t like that at all.

Photo by David McBee on

This is obviously a US security issue, but it doesn`t look like the Biden administration care much about right now. But they should, and that very fast if you ask me. The US often use sanctions on other countries, but now China can use their digital currency as a weapon on the US.

The communist China are pushing the IMF to the SDR (special drawing rights) issue. The currency value of the SDR is determined by summing the values in U.S dollars, based on market exchange rates, of a basket of major currencies.

The IMF`s SDR, the international reserve asset created in 1969 to prepare for a new dollar crisis, is undergoing a renaissance, with important worldwide repercussions. The announcement of by far the largest-ever increase in SDR allocations, which will greatly improve the liquidity of many developing nations, signals alignment between the US and China in a key area of global monetary power.

The US now agrees with using the IMF`s balance sheet to boost world liquidity. They are planning to more than triple SDR allocations by at least $500bn. This reflects a change in US policy to back measures strongly advocated last year by China as well as leading European and African countries.

Rich nations with large reserves will distribute part of their plentiful SDR stocks to poor countries.

The massive increase in SDR reserves, which can be converted into its five constituents; the dollar (42%), euro (31%), renminbi (11%), yen (8%) and sterling (8%) will indirectly boosts the Chiniese currency`s international reserve role, according to OMFIF (Official Monetary and Financial Institutions Forum).

In 2009, the United Nations suggested a new SDR-based global reserve system, feasible non-inflationary, and easily implemented, including in ways which mitigate the difficulties caused by asymmetric adjustment between surplus and deficit countries.

That same year, Zhou Xiaochuan, governor of the People`s Bank of China, proposed that the SDR could become the pivotal internationall reserve currency, disconnected from individual nations, as the light in the tunnel for the reform of the international monetary system.

Is this how they`re gonna reset the international monetary system?

To contact the author:

Disclaimer: The views expressed in this article are those of the author and may not reflect those of The author has made every effort to ensure the accuracy of the information provided; however, neither nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Crypto, Emerging markets, Politics

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.