Beijing Seeks Wider Adoption of Digital Currency Amid US Stablecoin Concerns

China Calls for Digital Yuan Expansion Amid US Stablecoin Dominance Concerns

China is accelerating its plans to expand the use of its digital currency, the digital yuan, amid concerns over the growing dominance of US-based stablecoins in the global market.

According to a report by the People's Bank of China (PBOC), the country's central bank, the digital yuan's transaction volume has surpassed 100 billion yuan (approximately $14.5 billion) since its launch in 2020. The PBOC has now called for a further expansion of the digital currency's use, particularly in the areas of cross-border transactions and international settlements.

The move is seen as a response to the growing popularity of US-based stablecoins, such as Tether and USDC, which have gained widespread adoption in international trade and commerce. The dominance of these stablecoins has raised concerns over the potential risks and challenges they pose to the global financial system, including the possibility of a stablecoin-induced financial crisis.

China's digital yuan, also known as the e-CNY, is designed to be a sovereign digital currency, backed by the Chinese government and pegged to the value of the yuan. The digital currency has been touted as a key tool in China's efforts to promote financial inclusion, reduce transaction costs, and increase the efficiency of cross-border payments.

The PBOC has also emphasized the need for the digital yuan to be integrated with international financial systems, including the use of blockchain technology and other innovative solutions. The central bank has also called for the development of a comprehensive regulatory framework to govern the use of digital currencies, including the digital yuan.

The expansion of the digital yuan's use is seen as a key step in China's efforts to promote its digital currency as a global payment system, and to challenge the dominance of US-based stablecoins in the global market. The move is also seen as a key part of China's broader efforts to promote its digital economy and increase its global influence in the field of digital finance.

As the global digital currency market continues to evolve and expand, it is likely that China's digital yuan will play an increasingly important role in international trade and commerce. The move is also likely to increase competition between China and the US in the field of digital finance, and to raise questions over the potential risks and challenges posed by the growing use of digital currencies in global markets.