Bitcoin is ruling the digital currency world, but the digital Yuan invented by China is going to target the US dollar now directly. China has learned the significance of cryptocurrency and is trying to compete with US dollars, with the highest predicted digital Yuan.
Matthew Graham, an investment bank and has gained a considerable reputation in the investment banking world and Sino Global Capital, a company based out of China, has analyzed the outcome of the upcoming digital currency. They know that the Chinese government would consider the new technology as the leapfrog opportunity to push the dollar value down.
Graham spoke with this Michael Gu, the founder of Boxmining, though it is challenging for China to beat the dollar value; in 2020, the transactions are still taking a couple of days to complete. This is turning out to be an expensive option for many. The technologies that are available in the market are now using USD centric global economy.
Beijing is using DCEP, which would be the upcoming digital currency electronic payment system that took some of the blockchain details to develop the concept, including UTXO.
DCEP is far away from the blockchain, especially bitcoins. However, DCEP would be issued by the People’s Bank of China and under its control and authority. It works similar to the traditional fiat currency. However, Graham highlighted that if you are going to use DCEP based on the crypto or blockchain framework, it becomes tough for you to understand what is critical.
Many new technologies are working together with the digital Yuan. A few of the aspects that are used in implementing the digital Yuan have made use of blockchain concepts. However, these concepts are not used as regularly used in the digital cryptocurrency concept.
It is good for DCEP to gather the data required in real-time based on the creation of money and bookkeeping. This gives an excellent reference to provide the money and comes up with the monetary policies. Many experts and prodigies in the world of technology suggested using the DCEP concept to implement negative interest rates. There is a chance to use Artificial intelligence and machine learning to detect fraud. It can be automated to detect fraud.
DCEP is not a bitcoin but is used to internationalize the renminbi. The technologies that were developed a few decades ago would cost a lot of expenses. The DCEP is the best opportunity that is available with China to rival US dollars. However, its intention is not to put significant focus on bitcoin, but want to give a fierce competition to the US with their digital Yuan.
China’s central bank digital currency (CBDC) would significantly impact how the money would be moved between the financial institutions. It is again going to become a serious issue between the US and China. These two global and extremely powerful countries are fighting to carry out the trading, and this digital Yuan would further add fuel to the fire between the relationships of both the countries.