The best way to reduce the United States’ influence over other countries’ economies is to reduce their dependency on the dollar for conducting trade. This section explores the trends that explain why the days of the dollar could be numbered. This development marks a significant shift from late 2022, when OpenAI’s ChatGPT launch sparked a scramble among Chinese firms to catch up. While initial Chinese efforts, such as Baidu’s chatbot, disappointed observers, DeepSeek’s achievements have dramatically shifted the narrative.
This will increase the influence of China thereby diminishing India’s role in regional affairs. The first system is tasked with distributing the currency between the central bank and commercial state-owned banks, as well as large fintech companies. The other system is responsible for interconnecting commercial banks with individuals and businesses. Digital Yuan can be transferred from the bank accounts of the eight commercial banks mentioned above straight into customers’ wallets or special apps developed by the same banks. To distribute the funds to the customers, these commercial banks must deposit the same amount of CBDC with PBoC.
The most celebrated feature from the consumers’ point of view is the dual-offline payment(双离线支付 shuang lixian zhifu). Although the feature of offline payment is available in Apple pay and Samsung pay in many countries, it would be the first time China would witness digital offline payment. Not to mention, the users living in weak network areas such as rural remote villages will greatly benefit from this feature. This feature makes sure that in terms of usability, DCEP offers all the convenience it can. The Chinese government is particularly interested in bypassing SWIFT because the list of Chinese politicians, individuals, and companies on the U.S. sanctions list continues to increase.
Although the United States is a dominant market player in privately traded cryptocurrencies, it has not spent the past decade seriously researching and testing CBDCs as China has. There is some hope, as early versions of a US CBDC being developed in conjunction with MIT have proven more sophisticated than the digital yuan, being able to handle over five times more transactions per second. For now, as the Vice President of a Beijing-based cryptocurrency firm Ian Wittkop writes, CBDCs are “a field of one.” In our post-pandemic world, with trends such as e-commerce, social media, and remote work, it is clear that the world is becoming more and more digital. A financial system dominated by CBDCs and, by extension, China, could become an inevitable reality. Every business in the whole variegated, complex supply chain will make a digital transfer from its central bank digital currency (CBDC) account. The People’s Bank of China is collaborating with the world’s main agency for international payments, the Society for Worldwide Interbank Financial Telecommunication, to expedite financial transfers in digital yuan.
None of them will have to borrow money from an international bank and keep it on deposit for months while waiting to see whether the delivery arrives. Seamlessly connects node operations and physical transportation, provides early warnings for active risks, and delivers the full-range of visible management, including the one-stream-of-materials concept. Through mobile apps, AIS, IoT, and other advanced logistics technologies, the system perceives the locations of vehicles, the operating status of warehouses, and other information in real time. The theoretical concept of Central Bank digital currency (CBDC) came up years ago. But presently it is being mulled over and experimented with in different ways by governments across the world. Although the particulars can vary because of many CBDCs being in the early stages of conception or experimentation, there are some underlying features of this new concept that seems to be the same in every case.
While suppressing private cryptocurrencies, China has accelerated development of its Central Bank Digital Currency, the digital yuan, while simultaneously supporting AI development through companies like DeepSeek. Xi’s government banned crypto mining and trading in 2021, but this move aligned with broader goals of promoting state-controlled digital innovation. The combination of advanced AI capabilities and a state-backed digital currency represents Xi’s vision of modernizing China’s technological and financial systems while maintaining strict oversight. The importance of being relevant in the modern global economy as an economic power cannot be overstated. As China builds out its physical infrastructure across the world, it is keeping an even gaze on the push for a less centralized global financial system. With their development of the DCEP program, they are showing their ability to adapt to rapidly occurring changes in technology, as well as a desire to lead.
While this may sound far-fetched, China has massive influence over countries in Africa and Asia, where it can easily negotiate the regulations required to distribute its digital yuan to foreign nationals. China has required Alipay to switch its Quick Response (QR) code payment clearing system to UnionPay (China’s domestic card scheme). In early 2020, PayPal Holdings Inc. also announced its partnership with UnionPay.75 This partnership allows UnionPay cardholders to access PayPal’s extensive network and could lead to UnionPay cards being accepted in all physical retail locations where PayPal is currently accepted. UnionPay cards are already accepted by over 27 million merchants in 173 countries.76 China can use this established network to set up PoS across countries where UnionPay exists.
China will have the opportunity to fashion itself as the pioneer of CBDC and emerging tech. This reflects that China is up to speed with the technological advancements taking place in the world and is even pioneering in a few. There could be no better occasion to send out this message other than the Olympics where countries from all around the world participate.
