China's transition to a digital currency does it threaten dollarization?

Ahmet Faruk Aysan*, Farrukh Nawaz Kayani

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

30 Citations (Scopus)

Abstract

This article provides a detailed introduction to China's launching of a digital currency. We conduct a comparative analysis concerning whether digital currency is a more stable and reliable currency than cryptocurrency and investigate whether a digital renminbi (or yuan) could replace the US dollar as a medium of exchange in international transactions. China has gained a first-mover advantage by rolling out a central bank digital currency (CBDC). But the outcome will depend on the US response as well as the future evolution of the US and Chinese economies. Most other articles on this topic focus on domestic use of the Chinese CBDC. But this study is unique in analyzing the prospects of a digital renminbi as a replacement for the US dollar in international commerce.

Original languageEnglish
Article number100023
Number of pages6
JournalAsia and the Global Economy
Volume2
Issue number1
DOIs
Publication statusPublished - Jan 2022

Keywords

  • China
  • Cryptocurrency
  • Digital yuan
  • People's Bank of China
  • Us

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