February 4, 2023

U.S. considers Chinese cryptocurrency launch scenario

U.S. considers Chinese cryptocurrency launch scenario

Former U.S. officials during Harvard school war games Kennedy and the Belfer Center for Science and International Relations in Cambridge, Massachusetts examined the effect of introducing the digital currency of the Central Bank of China (CBDC), reports CoinDesk.

Maintain dollar dominance with SWIFT

During the exercises, the scenario was considered whenChina’s CBDC undermined the dominance of the dollar in the global financial system, North Korea used the digital yuan to build and test nuclear missiles, successfully avoiding financial sanctions imposed by Washington, and attackers steal funds from the SWIFT communications network.

“The competitiveness of the US dollar isa matter of national security. The global dominance of the dollar may change if suddenly another currency becomes more interesting and viable. We must keep up with this innovation. ”, - said the character performing the role of adviser to the President of the United States at the exercises.

The digital currency of the central bank of China may have a greater impact on the hegemony of the dollar than the diplomatic relations of the United States with the most populous country in the world, according to project participants.

"In essence, our ability to impose sanctions on North Korea depends on Chinese cooperation ... this was true before the digital yuan, and it will work after the digital yuan."

However, during the exercise, it was suggested that the digital dollar will not be able to withstand the threats of the new digital financial system:

“If we have our own digital yuan,"the digital dollar, the national Venmo, whatever the hell, it will not be able to interfere with the ability of another digital currency to conduct its own financial transactions."

Based on the results of the exercises, former politicians came to the conclusion that the US should further strengthen the security of SWIFT and not consider the possibility of issuing a digital dollar:

“A reliable SWIFT that is safe should be our top priority, and developing a digital dollar will be the worst idea in the world.”

Recall, the other day there was official information that the US Federal Reserve is considering the possibility of launching a digital currency of the central bank (CBDC).