June 7, 2023

Paul Melchiorre: "China's digital currency could threaten the US dollar"

Article reading time:
2 minutes.

Paul Melchiorre: "China's digital currency could threaten the US dollar"

A Messagepoint board member and portfolio investor said China's state digital currency could undermine the US dollar's role in international trade for the foreseeable future.

Paul Melchiorre stated that he sees great potential for central bank digital currencies (CBDC) in the international financial market.

From an investor's point of view, the decisiveCBDC society will be aware that state stablecoins are not a soap bubble inflated with futuristic promises, but a financial product created on the basis of familiar national currencies provided by the Central Bank and the government.

“Even though e-CNY is still inpilot mode, the Chinese digital currency has already shown significant coverage, and the frequency of transactions shows a focus on global dominance,” Paul Melchiorre refers to a report that over $10 billion in transactions were registered in the e-CNY system in 2022.

Paul Melchiorre recalled that the digital yuan waspresented to the world at last year's Beijing Olympics and, thanks to the active promotion policy of the PRC government, quickly gained multibillion-dollar turnover.

“We are witnessing a fierce struggle between the US and China over whose money should become the world's settlement currency for trading,” the businessman believes.

According to the investor, without the creation in the USAeffective competing systems, China could "force trading partners to use its digital payment system" by replacing the US dollar and jeopardizing the benefits the United States derives from its national currency's popularity.

In early May, the French BNP Paribas announced
on cooperation with the Bank of China and the introduction of a digital yuan settlement program for corporate clients.