China has taken an unprecedented step towards cryptocurrencies and blockchain technology and launched the world’s first government-backed cryptocurrency on November 2nd, 2021, and, if the digital yuan succeeds, and weakens the USD too much, the dollar’s status as global reserve currency could also be at stake.
An article by Lorimer Wilson, Managing editor of munKNEE.com, Your KEY To Making Money!
Why Has China Created A Digital Currency?
China has been working on a sovereign digital currency since 2014. Their currency, the Digital Currency Electronic Payment (DCEP) – also called the e-CNY, the e-Yuan, the digital RMB or Yuan Cryptocurrency – is the virtual form of Chinese renminbi issued by the People’s Bank of China. e-CNY is not meant to replace Chinese renminbi but to be circulated alongside deposit accounts and other payment methods.
Digital Currency Electronic Payment (DCEP) has been gaining momentum over time and is already being used to pay for transportation, education, and other goods and services across China. The Chinese digital currency will not only help strengthen the yuan against the dollar but will also make the yuan an international currency and help facilitate trade across borders. The traceability of DCEP will help reduce illegal activity and help China create a more effective monetary policy.
However, according to Dr. Jonathan Ward, founder of Atlas Organization, a strategy consultancy on U.S.-China global competition, China has created a digital currency to hopefully “offset” U.S. sanctions and, if the digital yuan succeeds, and weakens the USD enough, the dollar’s status as global reserve currency could also be at stake and, if the dollar loses its hegemony as the global reserve currency, we’d see an all-fronts crisis.
- All those overseas dollars (somewhere between 60 to 85% of the world’s paper dollars are outside the U.S.) would come flooding back.
- Global central banks would no longer have any interest in holding U.S. Treasury bonds and bills.
- Inflation would skyrocket and a dollar disaster would
- push up interest rates for American consumers and businesses, making everything from buying a house to building a factory more expensive,
- make imported goods and services much more expensive and
- make the U.S.
- increasingly isolated,
- sidelined by the rest of the world,
- busily printing and passing around green slips of paper that no foreigner would want for anything (other than, perhaps, a souvenir).
Optimists hope such a process would take years, but who knows? If the Chinese e-yuan takes off, the dollar could weaken much faster, and, the fact is, that the process has already started.
What Is the E-Yuan’s Potential Appreciation?
China’s digital coin, the e-Yuan, is the world’s first cryptocurrency that has been government-backed and, once the majority of coins have been exchanged, economists expect the price increase to be unparalleled with early adopters set to reach record profits in the crypto space.
Indeed, according to Tan Eng Chen, Head Financial Analyst of DMO Financial Group, the scientific community of financiers believes the Chinese cryptocurrency can overtake Bitcoin in 10 years claiming that:
“We think that by the end of November, when the news spreads around the world, the price of the Chinese cryptocurrency will have grown at least 10 times and, most importantly, if China continues to actively develop blockchain technologies, they have every chance of surpassing Bitcoin in terms of price and capitalization in 10 years. Below is a chart with a price in $US forecast for the next half year:”
How Does One Buy the E-Yuan?
The current price of one of China’s e-Yuan coins is C$0.016 (price updated every 15 minutes) and YuanPay Group, the only company approved to trade and sell cryptocurrencies, doesn’t charge any fees from any trade, so if you wish to buy China’s new coin go here. The minimum purchase is as little as $250 and, according to their web site, if you buy 13,888 coins now, before it is offered to every crypto exchanger in the world, you will receive 27,776 as an introductory promotion for an immediate profit of C$222.21.On the surface that seems to be too good to be true but over the past year China has undertaken real-world trials in a number of major Chinese cities giving away in excess of US$12M in the process. The current 2-for-1 introductory promotion is seen as a major push to get traction for the e-Yuan outside of China.
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