China could launch its digital currency in the next 6 to 12 months. That could become a challenge to the global dominance of the US dollar, according to fund manager Edith Yeung.
20 November 2019, AtoZMarkets – In recent years, the Chinese government is researching and studying the possibility of launching its digital currency. And it has identified entities for a potential deployment, said Mr. Yeung, a partner of the blockchain venture capital fund, Proof of Capital.
China Might Launch Digital Currency in 2020
It's something that's been in the planning for a few years. She told CNBC that at East Tech West conference in Nansha District, Guangzhou, in China on Wednesday. Asked when a virtual yuan could become a reality, she replied that it could be "very soon." "So I think in six to twelve months," Yeung said.
China has recently put all its weight behind the blockchain - the technology behind cryptocurrencies like Bitcoin. State media reported that President Xi Jinping said China should seek to take the lead in technology.
Wendy Liu is the head of China strategy at UBS. He also told CNBC that China is more willing than elsewhere to support 5G technologies and the supply chain. This is because they are essential to facilitate and manage trade in the most populous country in the world, she said.
"Because of its own needs, (China) will push in this direction. And you see this willingness to support these technologies more than anywhere else," Liu said. According to some experts, China spends more than the United States in developing 5G - the next generation of mobile services. That promises ultra-fast data speeds can support driverless cars.
The Chinese Yuan Could Challenge The US Dollar
The US dollar remains the "main" world currency. However, Yeung said the increased use of the Chinese yuan could "challenge the United States." President Xi Jinping's signature infrastructure project is the One Belt One Road initiative. That aims to connect more than 60 countries in Asia, Europe, Africa, and the Middle East.
"I think the United States has to hurry up to have a strong thought and policy, at least one direction for a virtual dollar." In June, social media giant Facebook unveiled its plan for its Libra digital currency project. But these plans have been undermined in the context of privacy concerns. And it impacts on the global financial system.
For her part, Yeung said the Libra project had inspired other countries to think about the potential of their own virtual money. "I think what has been done on the side of Libra, instead of promoting the adoption of Libra. That is what drives the whole world, the central banks, to embark on the digital currency game, "she said.
Think we missed something? Let us know in the comments section below.