China's new digital renminbi by itself will not help the currency to challenge the US dollar’s global dominance. Its true significance instead lies in its potential to shift the competitive balance of power between the country’s technology giants and traditional banks.
NEW YORK – While many central banks are still investigating the possibility of issuing a digital currency, China has rolled out a digital currency via a series of pilot programs since last year. The eRMB (my term as opposed to the more awkward official DC/EP) by itself will not help the renminbi to challenge the US dollar’s global dominance. Its true significance instead lies in its potential to alter the balance between China’s technology giants and traditional majority state-owned banks, thus indirectly enhancing the banks’ international competitiveness.
NEW YORK – While many central banks are still investigating the possibility of issuing a digital currency, China has rolled out a digital currency via a series of pilot programs since last year. The eRMB (my term as opposed to the more awkward official DC/EP) by itself will not help the renminbi to challenge the US dollar’s global dominance. Its true significance instead lies in its potential to alter the balance between China’s technology giants and traditional majority state-owned banks, thus indirectly enhancing the banks’ international competitiveness.