Back in the 7th century, the Chinese broke ground by inventing paper money that would soon be the norm all over the world. Today, they are working to once again change the face of finance by creating a new form of government currency that some believe will pose a serious economic threat to the United States and other countries in the West - and the world.
Former U.S. executive director with the World Bank, Erik Bethel, told CBN News that while the world is fascinated and obsessed with cryptocurrencies such as Bitcoin, China is preoccupied with developing a digital version of its own currency, the Yuan, which is also known as the Renminbi. This not only serves as a tool to control its citizens, but will also threaten the global reign of the U.S. Dollar.
"In effect, they are not cryptocurrencies, they are not so-called stable coins, in effect, they are the national physical currency of a country just represented in a digital form," Bethel said.
"They've pretty much created all of the building blocks that will allow a central bank digital currency to flourish," Bethel remarked.
Meanwhile, former CIA economic and counterterrorism analyst Yaya Fanusie said that China is looking to replace cash with a digital currency that is controlled by the Chinese Communist Party's (CCP) central bank.
Fanusie, who is also a senior fellow at the Center for a New American Security, explained that China is looking to become a "cashless society" in the near future. This means that cash notes, coins, and currencies will only exist in people's digital wallets.
Such digital currency will be issued by the government, which will then have an "unprecedented access to people's financial transactions," Congressman Michael McCaul, the top Republican on the House Foreign Affairs Committee, argued.
Rep. McCaul warned that such a financial model will allow the government to have "data on behavior and how people spend."
According to MarketWatch, China's Renminbi has been in development since 2014 and has launched pilot projects in four major cities in 2019. In November 2021, it had expanded to six more cities including Shanghai, a financial hub, as per a white paper from the People's Bank of China. But not all American experts are against the Renminbi and its implications for the U.S. economy and geopolitical standing.
Robert Greene of the Carnegie Endowment for International Peace remarked that the Renminbi may "become the backbone of a meaningful cross-border payments [system]." Similarly, the Bank of International Settlements, an international financial organization run by global central banks, published research in September saying that central bank digital currencies may reduce the time it takes to make cross-border payments and could also cut costs in about half.
Renaissance Macro Advisors head of policy Steve Pavlick remarked, "Opposition and animosity to China is one of the few bipartisan forces there is right now. There is a strong desire to preserve the dollar's supremacy. If there's a way to do that without the unintended consequences of hurting your domestic finance industry."
