The Chinese authorities, through the country’s Made in China 2025, have invested in a number of leading Chinese technology companies to dominate the future of 5G, artificial intelligence, genomics, robotics and semiconductor chips. The Chinese have used state-owned enterprises to bet on winners to directly take on U.S. big technology companies. One area of overt competition is in the creation of a central bank digital currency (CBDC).
For years, China has banned cryptocurrency projects, outlawed exchanges and even blocked industry meetings, while figuring out how to use the disruptive technology for a sovereign-backed central bank digital currency to further centralize power in Beijing. This past year, the People’s Bank of China has rolled out its Digital Currency Electronic Payment (DCEP) initiative with a major pilot implementation project underway. Several lottery efforts to promote the DCEP were undertaken and a business-friendly, blockchain-services network was added.
The U.S. government did little to compete. In March, the U.S. government considered creating digital wallets for stimulus payments to the 17 million unbanked households in the United States. An early House of Representatives bill for the Payment Protection Program had provided for such a distribution, to the delight of many advocates for a digital dollar, only to see the final legislation forgo such a visionary step.