The 20th century was a rough one for China, the early portion included many incursions with Japan, then outright war. After WWII China was vulnerable and succumbed to the advent of Communism.
In spite of or maybe because of Communism China wants to be recognized as a world leader, but one who will not be called out about the treatment of its citizens.
In the distance past nearly 900 years ago, China’s Song dynasty government, at the time the most advanced civilization in the world, issued the world’s first centralized paper currency.
When Marco Polo encountered money made from the “bark of trees” circulating universally within the Mongol empire during the Yuan Dynasty, one hundred years later, he witnessed a financial system with efficient, long distance transactions, and a central banking authority with the complete trust of the population.
Today, the world is on the cusp of another technological revolution in how humans conduct commerce. Again, China is at the fore, leading the way from cash to cryptocurrency with a new central bank digital currency (CBDC), commonly known as the digital yuan. Although the US dollar remains the world’s dominant fiat currency, an analysis of the geopolitics surrounding the battle for currency hegemony reveals that China’s digital yuan may pose a serious challenge to the dollar status quo as the 21st century unfolds.
What remains to be seen is if China attempts to exert control or influence over the digital yuan, as it does the paper yuan.