🇨🇳China has a new plan to compete against the dollar, what is it?

Worried about the limited impact of its CBDC and Trump's advancements with cryptocurrencies, financial analysts see a way out in stablecoins linked to the yuan.

Just like in Europe, the advancements of Donald Trump's government in supporting the bitcoin (BTC) ecosystem and other cryptocurrencies are under China's scrutiny.

The financial analysts in the Asian country are also concerned about the push that the U.S. is giving particularly to stablecoins linked to the dollar. A type of currency that the U.S. government sees as the way to maintain the global hegemony of the dollar, threatened in recent years by the rise of cryptocurrencies and other currencies. However, unlike Europe, which aims to launch a digital euro (its central bank digital currency or CBDC) as soon as possible, China proposes the development of stablecoins linked to the yuan (renminbi or RMB).

This plan was proposed by the deputy director of the Institute of Finance and Banking of the Chinese Academy of Social Sciences and the National Laboratory of Finance and Development, Zhang Ming, in an article that has gone viral in Chinese media.

The analyst talks about the three types of digital payment systems that are gaining traction in the current world: digital currencies like bitcoin, stablecoins, and CBDCs. The latter are achieving the greatest impact on the international financial system. In this scenario, Zhang proposes that China develop its own stablecoins linked to the RMB, to counteract the dominance of the dollar and expand the global influence of its currency.