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China digital currency: Biden administration steps up scrutiny of e-yuan over potential threat to US dollar dominance
- The People’s Bank of China (PBOC) has rolled out trial issuance of a digital yuan in cities across the country, putting it on track to be the first major central bank to issue a virtual currency
- Members of the US Congress have also been increasingly interested in a digital US dollar, and asked US Federal Reserve chair Jerome Powell and US Treasury Secretary Janet Yellen about the issue in hearings earlier this year
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The Biden administration is stepping up scrutiny of China’s plans for a digital yuan, with some officials concerned the move could kick off a long-term bid to topple the US dollar as the world’s dominant reserve currency, according to people familiar with the matter.
Now that China’s digital currency efforts are gathering momentum, officials at the US Treasury, State Department, Pentagon and National Security Council are bolstering their efforts to understand the potential implications, the people said.
American officials are less worried about an immediate challenge to the current structure of the global financial system, but are eager to understand how the digital yuan will be distributed, and whether it could also be used to work around US sanctions, the people said on the condition of anonymity.
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A US Treasury spokeswoman declined to comment, while a National Security Council spokeswoman did not reply to a request for comment.
The People’s Bank of China (PBOC) has rolled out trial issuance of a digital yuan in cities across the country, putting it on track to be the first major central bank to issue a virtual currency. A broader roll-out is expected for the Winter Olympics in Beijing next February, giving the effort international exposure.
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