Central Bank Digital Currency Expected to Drive Internationalisation of the Renminbi
A leading figure from China’s internet finance sector has highlighted the ability of the Chinese central bank’s proposed statutory digital currency to help drive the internationalization of the renminbi.
In an interview with the state-owned Securities Daily Yi Huanhuan (易欢欢), chair of Yigu Tianxia (易股天下) and head of the Beijing Internet Finance Association Research Institute, said that China’s central bank digital currency will provide a driving force and “opportunities to overtook cars at the bend” when it comes to the future internationalisation of the renminbi.
According to Yi as China’s national power and economic size increase the internationalisation of the renminbi will become a “historic necessity,” while relevant technologies needed for the development and issuance of a central bank digital currency have already matured.
Yi also recommended that China look at the historical experiences of the British pound and the US dollar when it comes to driving the internationalisation of the renminbi.
He pointed in particular to the impact of limited gold supply on the fortunes of the British pound after World War II, as well as the subsequent dominant position of the US dollar in global trade and sovereign reserves, alongside the undermining of its position by its recent long-term deficits and issues of debt.