The US national security apparatus is warning other authorities of the arrival of China’s digital currency.
Wednesday the The Washington Examiner reported on a letter that the director of the National Intelligence Service, John Ratcliffe, sent to the chairman of the Securities and Exchange Commission, Jay Clayton, earlier this month.
According to the message, Ratcliffe offered to brief Clayton employees on the security issues arising from China’s dominance in crypto mining, as well as the country’s progress in this area Digitization of the yuan. Ratcliffe’s letter apparently also motivated Clayton to keep U.S. cryptocurrency companies competitive.
Cointelegraph has covered the race for a central bank digital currency (CBDC) at length. Of the major economies, China appears to be the closest to the start.
Since Bretton Woods in 1944, the United States has enjoyed privileged status as the issuer of the US dollar, the world’s reserve currency. To date, almost all international trade is done in dollarsHowever, this is changing for countries like Russia and China, which are subject to extensive US sanctions.
The special status of the dollar allows the Federal Reserve additional flexibility to print more dollars without getting into hyperinflation as there is high demand beyond the coast of the United States.. It is also this particular law that allows US sanctions to be such useful instruments of international influence.
A successful digital yuan could challenge the dollar’s status in international trade. The other side of the coin, however, is that many see the digital yuan as a surveillance tool for the Chinese Communist Party. While this could reduce demand, this improved access to information could be another factor that Ratcliffe is concerned about.
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