By Amaka Obi
Amid the COVID 19 backlash, China has gone on to test state run digital currency to counter the Dollar monopoly. In major cities, China’s central Bank has reportedly began trials of the e-RMB. It is the first digital currency operated by a major economy. The four cities currently undergoing the trials are Shenzhen, Chengdu, Suzhou, Xiong’an a new south of Beijing as well as areas that will host some of the events for the 2022 Beijing Winter Olympics. It has been formally adopted into the cities’ monetary systems, reported state media outlet China Daily, but the official date for its roll out has not yet been released but some local report claim mid 2021
As reported by The Guardian, Some government employees and public servants will receive their April salary in the digital money, the e-RMB. The country also plans to use the digital money to subsidize transport in Suzhou, but in Xiong’an it will be used mainly for food and retail,
Xu Yuan, associate professor at Peking University’s national development research institute, told broadcaster CCTV, “Although there is little change from the perspective of user use, from the perspective of central bank supervision, future forms of finance, payment, business and social governance etc, this is the biggest thing ever.”
The introduction of the new monetary system is perceived as China’s move to counter the dollar and to provide investors and businesses with an alternative to dollar payments. Many countries have already put China on the receiving end as it was the starting point for the emergence of the novel coronavirus a world health pandemic that has infected more than 3 million people worldwide and threatened the economic sector around the world.
Another opinion piece from China Daily states that “A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level. It may also facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption. The stability of the Chinese yuan during the COVID-19 crisis has enhanced its appeal to many investors. These two settlement systems–US dollar and China sovereign digital-may operate side by side or if need be, on a mutually exclusive basis,”