SEC commissioner Hester Peirce stated that the planned digital yuan will not overshadow the dollar.
The People’s Bank of China has begun testing the digital yuan in certain cities.
Some worry that the digital yuan will discredit the dollar.
Hester Peirce is confident that the dollar will remain valid.
As the interest in digital currency grows, we are beginning to see really big names entering the market. The People’s Bank of China is one of those who started this business. The goal is to improve payment systems and prevent the rise of cryptocurrencies.
China is very close to launch e-yuan
China has officially confirmed that its central bank-backed digital currency is being beta tested in cities across the country.
Some organizations in the US government are looking closely at the digital yuan to assess its potential threat to the dollar.
Zhou Xiaochuan, a former official of the People’s Bank of China, tried to comfort these interested parties by stating that e-yuan will only be used domestically. Zhou claimed that using e-yuan as a global reserve currency would not only be practical, it would have negative consequences.
The project prepared by the PBOC is apparently part of an effort to globalize the yuan. China is already ahead of many other countries on the road to digitalization. The pace China has set here worries some analysts about the possibility of the second-largest economy gaining dominance over the dollar.
SEC official says don’t worry
Peirce made a statement to ease anxious minds. Peirce, aka Crypto Mom, claims that the rise of stablecoins will be key to maintaining US currency status at the top of the world’s economic chain.
Even in 2021, there has been a tremendous growth in cryptocurrencies, these are actually private digital dollars. This could effectively be our answer to the Chinese CBDC.
Federal Reserve Chairman Jerome Powell stated in a separate statement that China’s digital yuan plans will in no way force the Federal Reserve to rush the digital dollar. He made it clear that the goal is not to launch a first time, but to avoid any mistakes while creating the digital dollar.