2020 may have been a tough year for most nations, but China could look back at this as the year when it entered the digital currency markets and took its first steps towards dominating the global financial system. The first steps towards challenging the domination of the U.S. dollar have already been taken with the launch of CHina’s digital version of the yuan, Digital Currency Electronic Payment, DCEP.
The rollout of the digital currency has been a slow one with trials taking place across the nation and a lottery providing around $1.5 million in digital currency to Chinese citizens. China is hoping the centralized nature of DCEP will help the nation become one of the leading members of the financial sector with its huge population helping drive the move to a cashless society. Around two million Chinese citizens registered for the lottery as this provides a starting point for the entrance into cryptocurrencies for everyday people to enjoy.
Currently, Chinese officials claim around four of every five transactions are completed using digital options. The release of over $150 million in digital currency released by the Chinese Central Bank is already making many global leaders worried about the rise of the yuan as the future of the international financial system. BY already releasing its currency, China is at the forefront of the sector and was not among the seven national banks agreeing to the blueprint for the release of digital currencies who met in October 2020.
The future of digital currency could already have been created because the Chinese authorities have already ruled it illegal to refuse digital currency as a form of payment. The lack of press coverage regarding the launch of DCEP comes as the majority of the public in the U.S. and Europe have less understanding of the role digital currency does and can play in the future. The U.S. is less concerned about digital currencies because the dollar remains the unit of currency for the majority of international business. However, with more than 39 million Chinese people living and working outside their home nation and expected to start using DCEP, the rise of the currency around the world is expected to be swift and increase the power of China as the dominant global economic force.