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- David Roche has recently said that he believes the digital yuan has a long way to go before it will be able to become a challenge to the dollar as a reserve currency.
- According to him, the central-bank digital currency in China could beat the US dollar as a reserve currency but it would take an extremely long time.
The president and global strategist at Independent Strategy, David Roche has recently said that he believes the digital yuan in China has a long way to go before it will be able to become a legitimate challenge to the United States dollar as a reserve currency.
According to him, the central-bank digital currency in China could, in theory, beat the US dollar as a reserve currency but it would take an extremely long time according to Roche. On top of this, the president highlighted that the euro accounts for around 20% of all international trade whereas the Chinese Yuan only accounts for 2% of global settlements as he went on to say:
“Dethroning the dollar — which the euro tried to do, and settled at a miserable 18–20% of all the international things that go on, is very, very difficult… There is a certain amount of illusion at the moment that the yuan, which accounts for 2% of international trade settlements and even less if you come to financial investment flows, that this can take over.”
Over the last 20 years, the president highlights that the United States economy has been shrinking but the dollar, on the other hand, is “increasing proportion of the settlement of international trade“.
The comments from David, shortly after the United States Federal Reserve chairman, Jerome Powell noted that the government is not worried about China being dominant over the CBDC industry going on to say that the country [US] will be focused on getting its right rather than just trying to win the race.
Numerous experts all around the industry are expressing their concerns over the US dollar losing its status if a digital version of the currency does not see a release soon.
Moreover, the idea of China releasing its own digital cryptocurrency is both exciting and worrying at the same time for money.