The deep anti-China sentiment in politics and international affairs today has attempted to isolate China. On the contrary, this has only bolstered the world’s most populous country.
China went ahead and tested its home-grown digital currency; Digital Yuan, resolutely trying to break the hegemony of the US dollar. The US Dollar (USD) accounts for 90% of all the financial transactions of the world. Out of 180 currencies used across the world, the USD is the strongest – especially when one considers that two-thirds of the world’s debt is in US dollars. It is also the currency used for all international trade in oil.
The Trump-Xi Jinping trade wars last year accelerated China’s resolve to reduce dependence on the US dollar. After years of anticipation, China made its digital currency and encouraged everyone in the cities that will house the 2022 Winter Olympics to use it. Some government employees found part of their salaries credited in this digital currency. The pandemic has been actively used to even push its digital currency agenda.
There are some pertinent questions for those watching the traditional and digital currency trends across the globe. First and foremost will the influence of the US dollar shrink in the coming years? Secondly, are we going to see an overthrow of the existing financial order? With the pandemic playing havoc on the world economy, the only thing to do is to wait and watch. In conclusion, I think a multi-polar currency is the need of the hour and the US Dollar needs to watch out for this uprising.