In the multidimensional geo-economic contest in which China and the U.S. are currently engaged, the future roles of their respective currencies have become a key focus of speculation. Concerns over debasement of the dollar have driven a surge in interest in cryptocurrencies. Meanwhile, the People’s Bank of China (PBOC) has been making steady advances in the roll-out of its own central bank digital currency (CBDC), dubbed the Digital Currency Electronic Payment (DC/EP).
It is conjectured that the Chinese CBDC will eventually eliminate China’s dependence on the dollar and dollar payment systems and propel the renminbi, also called the yuan, to usurp the dollar as the leading global reserve currency. However, the DC/EP alone is far from sufficient to truly internationalize the renminbi.
