China wants to lead to the internationalization of the digital yuan. This is a response to the policy of Donald Trump regarding the Stablecoin related to the American dollar.
China is afraid of Trump’s policy
The subject of cryptocurrencies returns in China, or more precisely: Stablecoin. Zhang Ming, deputy director of the Institute of Finance and Economics and the National Finance and Development Laboratory, warns that the current international situation definitely favors Stablecoin based on the American dollar, and this can also additionally instill the power of the United States over the international monetary system. Zhang is also afraid that if USD effectively combines stablecoin associated with the dollar with global credit markets, this may deepen the presence of the dollar in the economy.
Today, the Stablecoin market is dominated by solutions such as Tether (USDT) and USD Coin (USDC), which currently constitute almost 90% of the Stablecoin market. The USDT itself has a market capitalization of $ 143 billion while USDC USD 60 billion.
Ming suggests that China increases the use of their CBDC on domestic and international platforms, which will allow you to “react more calmly to challenges related to USD Stablecoin”.
Chinese reluctance to cryptocurrencies
China has a complicated and quite restrictive attitude towards cryptocurrencies, including Stablecoin. For years, the Chinese government has been taking various actions to control the digital assets sector. In 2013, the Chinese government recognized Bitcoin as “virtual goods”, but banned financial institutions to carry out transactions using cryptocurrencies. In 2017, Beijing banned the organization of Initial Coin Offerings (ICO). In May 2021, China announced a ban on kicking cryptocurrencies, which led to mass migration of miners to other countries (e.g. to the USA and Kazakhstan). Then the People’s Bank China found all cryptocurrency transactions illegal, prohibiting them from buying, selling and exchange in China.
What is the USA?
But what do Americans play? Do they want to strengthen stablecoin for the idea itself? NO. The goal of Donald Trump’s administration is to bring to such a situation in which the growing company emitting Stablecoin will additionally buy American debt, which for Washington is becoming a growing problem. Of course, dollar stablecoin will strengthen the dollar as such. Cryptocurrencies are therefore becoming another battlefield between the USA and China.
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