The end of the dollar - my country's digital RMB will be officially launched at the 2022 Winter Olympics

As early as last year, there were reports that China's digital yuan (CBDC) was planned to be put into use at the 2022 Beijing Winter Olympics. Sources close to the project insisted that the full launch of the digital yuan is still a long way off. However, it is entirely possible that the People's Bank of China will issue the central bank digital currency before February 4, 2022, which is the opening day of the Beijing Olympics. Recently, during the discussion of the Boao Forum for Asia 2021 Annual Meeting, Li Bin, director of the Central Bank's Macroprudential Management Bureau, revealed that at the end of 2019, the digital yuan will start pilot testing in Shenzhen, Suzhou, Xiongan New Area, Chengdu and future Winter Olympics scenes.

During the 2022 Winter Olympics, athletes not only in China but also abroad can experience the use of digital RMB. In fact, digital RMB has been launched in the one-year countdown to the opening of the Beijing Winter Olympics. In order to implement the Winter Olympics Science and Technology Action Plan and strengthen the construction of the Winter Olympics payment service environment, Beijing has launched the Digital Wangfujing Ice and Snow Shopping Festival Digital RMB pilot activities around the Winter Olympics consumption scene. It can be basically confirmed that the Beijing Winter Olympics is the first step for my country to launch digital RMB to the world.

What is the use of CBDC?

The technology behind money transfers in traditional finance has not really kept up with the pace of change in the rest of the world. While sending Bitcoin from one place to another is just a little more, remittances are not only costly but also take more time than is ideal. Governments around the world, including China, are actively developing their own digital currencies. The main benefit is that it can make the payment system more efficient and reduce costs for everyone involved. CBDCs can be thought of as digital fiat currencies, built on top of a new technology layer driven by blockchain technology.

Breaking through the dollar hegemony

Although Chinese participants repeatedly emphasized that CBDC is not intended to replace the US dollar internationally, nor is it a substitute for legal tender. But there is no doubt that the emergence of national digital currencies such as CBDC will inevitably break the dominance of the US dollar. In the field of settlement, especially in cross-border settlement and payment, the digital RMB is actually a dimensionality reduction attack on the US dollar Swift system. Countries that have been kicked out of the Swift system by the US dollar, such as Iran, can bypass the US dollar and directly connect with the RMB through CBDC, thereby breaking the blockade of the US dollar.

Venezuela once launched the legal digital currency Petro in order to break the financial blockade imposed by the United States on Venezuela and reconstruct the domestic financial order and monetary system. Of course, it will also improve the existing system and maintain the existing stability based on the pursuit of the most cutting-edge means of financial technology. It has to be said that the competition for digital currencies of central banks around the world has already begun. The sovereign digital currency pioneered by the central bank is an important measure to actively strive for the commanding heights of global finance. If we can be the first in the world to launch a digital sovereign currency, it will be crucial to promote the circulation and internationalization of the RMB and bypass the settlement system of the US dollar. Because digital currency has very strong security, anonymity and convenience, if other countries participate and do not trade in US dollars, the dominant position of the US dollar will naturally collapse, and then countries will no longer be robbed by the US dollar.

Of course, the United States will not sit idly by in this situation, and will inevitably launch countermeasures in the future. First, it will threaten other countries with its strong power, and second, it will also conduct digital currency research, and then it is likely to form a digital currency system dominated by the United States. But for digital currency, which is a new technology, as long as it has the first-mover advantage, it will have more advantages in future competition. my country's CBDC has been included in the development outline, and it will inevitably be the first batch of national digital currencies in the future.