Even though the U.S. Securities and Exchange Commission's (SEC) crusade against crypto is finally showing its first signs of fatigue, Washington's antagonism towards decentralized money has already set the country's financial innovation back many years.
Meanwhile, the world's second-largest economy is making astonishing progress in leveraging these technologies to maintain its commercial and financial might and tighten its geopolitical grip.
The best example of the country's efforts is the e-CNY. China's central bank digital currency (CBDC) was the spotlight issue at the China Digital Finance Forum held in Beijing last Thursday, where several new projects and partnerships to further enhance the e-CNY were announced.
According to a local news source, Singapore-based cross-border payments company, Thunes, and China Construction Bank will partner to develop two new projects to expand cross-border payments. One, called Shu Duo Hui, is designed to cater to the needs of small and medium-sized enterprises (SMEs), while the other, Shu Shan Da, aims to simplify international remittances for individuals.
"The new solutions should help expedite the internationalization of the Chinese currency by improving connectivity of the e-CNY with the rest of the world and facilitating China's international trade." Peter De Caluwe, CEO of Thunes.
Additionally, on October 12 in Nanjing, Jiangsu province, an industrial park opened its doors, inviting people and companies to assist with the further development of the digital yuan. Projects in the park will focus on improving the e-CNY as a cross-border payment option, performing blockchain technology-related research, and advancing digital ID verification, where the CBDC project has already made groundbreaking developments.
Expanding the use of the digital yuan into foreign territories is a core goal for Beijing. The U.S. dollar hegemony over international trade guarantees the United States' dominant position in world markets, leaving other countries to fight for its crumbs. The expansion of the e-CNY could upset the balance of power in China's favor.
Efforts towards expanding the usage of China's CBDC abroad have been ongoing for some time, targeting the Chinese diaspora and trade with neighbouring countries. There have also been several efforts to onboard tourists visiting China. The latest of these happened just last week with the inclusion of international cards, Visa and Mastercard, as top-up options in the e-CNY app.
While all CBDC initiatives must be subject to criticism and scrutiny, the significant efforts that China is devoting to making e-CNY an international means of payment beg even more challenging questions.