February 03, 2021
Post-Pandemic Tourism Could Boost China’s New Digital Currency
China finds itself in a strong position to release its central bank digital currency, the eCNY, following successful trials. The completion of the eCNY trials coincides with the rollout of the Covid-19 vaccine, and now that countries can ease travel restrictions and the hard-hit tourism industry can recover, China’s outbound tourism could become a catalyst for the global usage of the eCNY. This could become a defining moment for the internationalization of China’s currency, the renminbi, with a small chance of strengthening it enough to even begin challenging the U.S. dollar as the top global currency.
This could become a defining moment for the internationalization of China’s currency, the renminbi.
Since the 2008 Global Financial Crisis, China has worked to increase the overseas usage of the renminbi, especially as a means of challenging the dollar’s dominant position in international trade and finance. Despite consistently promoting the renminbi, China has faced significant hurdles in internationalization, particularly because of its strict currency controls. Importantly, the trade financing of Asian supply chains remains mostly in dollars, comprising approximately 80 percent of Asian banks’ international activities in the third quarter of 2019.
Meanwhile, to bolster China’s already strong currency regulation, the People’s Bank of China (PBoC, China’s central bank) developed the eCNY. Due to the PBoC’s oversight of the eCNY, it has the power to both monitor macroeconomic trends and manage the renminbi more directly.
Read the full article from The National Interest.
More from CNAS
-
Podcast
Transatlantic Security / Energy, Economics & Security
LISTEN: Why It’s So Hard to Go After Russia’s Oil RevenueEmily Kilcrease, senior fellow and director of the Energy, Economics, and Security Program at the Center for a New American Security, joins the show to talk about secondary ta...
By Emily Kilcrease
-
Video
Indo-Pacific Security / Energy, Economics & Security
Bloomberg Surveillance | Geoffrey GertzJonathan Ferro, Lisa Abramowicz and Annmarie Hordern speak with Geoffrey Gertz, senior fellow at the Center for a New American Security about NVIDIA.Watch the full interview o...
By Geoffrey Gertz
-
Commentary
Energy, Economics & Security / Technology & National Security
Sharper: Chips and Export ControlsAs competition between the United States and China has intensified, advanced technology has become the latest battlefield. After years of restricting China’s access to advance...
By Charles Horn
-
Podcast
Energy, Economics & Security / Technology & National Security
Export Controls: Janet Egan, Sam Levy, and Peter Harrell on the White House's Semiconductor DecisionJanet Egan, a senior fellow with the Technology and National Security Program at the Center for a New American Security, discussed the Trump administration’s recent decision t...
By Janet Egan
