China is now making strategic moves to establish its new global dominance in the sector of finance and capital flows. The country is all set to debut a yuan-backed stablecoin in Kazakhstan, a crucial part of Beijing’s plan to popularize the extensive offshore yuan usage. Will this move expedite the de-dollarization process, aiming to wound the US dollar?
Also Read: Dollar Decline: Is China’s Yuan Poised to Go Global?
China Set To Debut The Yuan-Backed Stablecoin: What Does It Mean?
China has long been playing with the idea of launching stablecoins as an effective means for trade and transactions. The Chinese regime is all set to launch a yuan-backed stablecoin in Kazakhstan this month, actively experimenting with the usage of blockchain technology in the cross-border payment domain, Reuters later shared.
China has always tried hard to win the global currency narrative, leading the charge to take the global reserve asset title away from the dollar. Yuan’s offshore transactions have increased tremendously, especially post the Russia-Ukraine war. It is to be noted that Yuan-based transactions between Russia and China are on a constant hike, reporting billions worth of trade exchange priced in the Yuan and not the dollar.
The current move is indicative of China’s active participation in the cryptocurrency space, a domain that the US has been trying too hard to prioritize at the moment.
“As US dollar stablecoins grow. Can you imagine a digital world in 10–20 years where there’s no place for the Chinese yuan on blockchains? Of course not… As a major power, China cannot miss any potentially promising technology and will invest in every direction, including blockchain. Yang, a computer scientist from Tsinghua University, told Reuters.
A Weak US Dollar Is Inviting More Trouble
The US dollar continues to weaken, driven by factors such as the “possible” US shutdown and economic volatility. With the Fed announcing additional interest rate cuts, the dollar is now losing strength, chipping away its value bit by bit.
With the rise of the multipolar currency system, these de-dollarization attempts have now gained momentum, with China stepping up to take the lead. The nation is now actively promoting a multi-currency setup, urging nations not to rely on a singular currency shaping global markets.
“Traditional cross-border payment infrastructures can be easily politicized. And weaponized and used as a tool for unilateral sanctions, damaging global economic and financial order.” Pan said.
The PBOC chief later shared how developing a multipolar system will help strengthen global financial stability and systems.
“Developing a multipolar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability,” Pan later shared.
Also Read: JPMorgan: Yuan Surges, BRICS Driving Global De-Dollarization