March 29, 2024

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

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

Member of the Board of Directors of Messagepointand a portfolio investor said China's state-owned digital currency could undermine the US dollar's role in international trade for the foreseeable future.

Paul Melchiorre said he sees great potential for central bank digital currencies (CBDCs) in the international financial market.

From an investor's point of view, it is decisive forWith the adoption of CBDC by society, there will be an awareness that state stablecoins are not a bubble inflated with futuristic promises, but a financial product created on the basis of familiar national currencies backed by the Central Bank and the government.

“Even though e-CNY is still inIn pilot 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 recorded in the e-CNY system in 2022.

Paul Melchiorre recalled that the digital yuan waspresented to the world at last year's Olympics in Beijing and, thanks to an active promotion policy on the part of the PRC government, quickly gained multi-billion-dollar momentum.

“We are witnessing a fierce struggle between the United States and China over whose money should become the global settlement currency for trading transactions,” the businessman believes.

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

At the beginning of May, the French BNP Paribas announced
on cooperation with the Bank of China and the introduction of a payment program in digital yuan for corporate clients.