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
-
The Long Tail of the Hormuz Energy Crisis with Rachel Ziemba
Podcast
Emily is joined by Rachel Ziemba, CNAS adjunct senior fellow and energy markets expert, to unpack the ongoing energy crisis resulting from the U.S.-Iran military conflict and ...
By Emily Kilcrease & Rachel Ziemba
-
India First Debate: Daniel Silverberg and Sandeep Unnithan on U.S. Rescue Op and Iran Air Defence
Video
In this episode of India Today, anchor Gaurav Sawant discusses a high-stakes US special forces mission deep inside Iran. Joined by Daniel Silverberg, Managing Director of Caps...
By Daniel Silverberg
-
Hit It with Your Best Shot
Reports
Executive Summary America needs an economic pressure doctrine. The country is using economic pressure in more novel ways and at greater scale than any other time in the postwa...
By Emily Kilcrease
-
CNAS Insights | A Year After Liberation Day, Can Trump’s Trade Wars Be Salvaged?
Commentary
As the trade wars have played out over the last year, the Trump administration has fumbled its opportunity....
By Emily Kilcrease & Geoffrey Gertz
