China’s Digital Currency Electronic Payment system is at the forefront of news around central bank digital currencies, or CBDCs. As China will be the first nation to launch a CBDC, the changes a digital yuan promises for global economics and the role this plan plays in pushing for a “currency war” keeps its project in headlines.
For its part, the proposed currency not only poses a threat but is intended to threaten, and potentially unseat, the U.S. dollar for the top position of global reserve currency. However, to understand how successful a digital yuan may be in this endeavor, it’s important to understand the current hierarchy of reserve currencies.
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