Bitcoin Won’t Replace the Dollar—but China’s Digital Currency Might

Bitcoin Won’t Replace the Dollar—but China’s Digital Currency Might
A sign for China's new digital currency, electronic Chinese yuan (e-CNY), is displayed at a shopping mall in Shanghai, China, on March 8, 2021. (STR/AFP via Getty Images)
John Mac Ghlionn
In 2009, bitcoin, the world’s first decentralized digital currency was created. Designed to replace the U.S. dollar, the global reserve currency, bitcoin has become a sort of Rorschach test for humanity.
Some have compared it to rat poison; meanwhile, other people, such as Eric Adams, the crypto-friendly mayor of New York City, are firm believers. Similarly, Jack Dorsey, the founder of Twitter, considers bitcoin a form of digital gold. Dorsey is such a firm believer in bitcoin’s potential that he thinks it’s only a matter of time before the world’s most popular cryptocurrency replaces the U.S. dollar.

He’s wrong. It won’t.

Bitcoin is inherently volatile. Its value fluctuates wildly. Moreover, until everyday people living in relatively stable countries can use the “currency” to buy everyday items, Bitcoin will remain more of a plaything for the millionaires and billionaires of the world.

Bitcoin currently is little more than a speculative asset, a gamble, a very risky bet. Nevertheless, in the not-so-distant future, the U.S. dollar could find itself usurped—not by bitcoin, but by China’s digital yuan (or RMB).

In a recent interview with CNBC, Richard Turrin, author of “Cashless: China’s Digital Currency Revolution,” discussed China’s digital yuan. According to Turrin, the digital yuan “will directly challenge the U.S. dollar’s domination of international trade settlements in the next decade.”

Turrin encouraged viewers to remember that China, the most populous country globally, also happens to be “the largest trading country” in the world. He said we will slowly but surely witness the digital yuan “supplant the dollar.”

By 2032, at the very latest, the digital yuan will likely have played a “significant role in reducing the dollar’s usage in international trade,” said Turrin, a former banker who once spearheaded IBM’s fintech team.
Turrin appears to be correct. Who controls the money, as they say, controls the world. Soon, it seems, China will control both. As I have discussed elsewhere, China’s new digital currency, which can now be sent as quickly as a text message, has become increasingly popular in developing nations, including dozens of African countries.

China, not the United States, is leading the race to establish a digital currency in the new digital economy. Since the early 2000s, Beijing has worked tirelessly to dominate the African tech sector, investing inordinate sums of money in the distribution of mobile handsets and creating mobile network layers.

Elaborate arches mark the entrance to Johannesburg's Chinatown. Once bustling, the area is now quiet as South Africa's economy hits the doldrums. (Darren Taylor for The Epoch Times)
Elaborate arches mark the entrance to Johannesburg's Chinatown. Once bustling, the area is now quiet as South Africa's economy hits the doldrums. (Darren Taylor for The Epoch Times)
Today, Beijing is in a solid position to make the digital yuan the currency of Africa, the fastest-growing continent globally. After all, as I have shown before, the digital yuan is now compatible with several very popular Chinese phone brands that dominate the entire continent, from Togo to Tanzania.

For the United States, the writing appears to be on the wall. It reads: Farewell to the dollar’s dominance.

As The Wall Street Journal recently reported, Saudi Arabia, one of the world’s largest oil exporters, is seriously considering pricing oil sales to China in yuan rather than dollars. If Beijing and Riyadh agree, then China, a country that buys more than 25 percent of Saudi Arabia’s exported oil, will become an even bigger player on the global stage. Furthermore, if Beijing and Riyadh agree to an alternative pricing strategy, the dollar will suffer immensely.
Most international transactions, including oil, are priced in U.S. dollars. But petrodollar dominance may soon become a thing of the past.
As the writer Philip Pilkington recently noted, if Beijing manages “to convince the Saudis to sell them oil in renminbi, then, if we also include Russia, countries that produce nearly 30% of global oil contracts will be open to renminbi contracts.”

“If we include Iran and Iraq, that number rises to just over 38%. Smaller oil producers will likely follow suit,” he wrote.

The United Arab Emirates, the largest exporter of oil globally, has close ties with China. Kuwait and Nigeria, two other major exporters of oil, are also closely tied to Beijing.
Make no mistake about it; the digital yuan is fast becoming the settlement currency of all international trade, according to author Chen Feng. With the “massive shift of Russian oil to China due to the European and US embargoes, coupled with Saudi Arabia’s switch to RMB settlement,” Feng believes we may soon see an increasing number of countries switching to yuan settlement.
Saudi Arabia’s pivot toward China also highlights the decline of the United States’ soft power—for example, the ability to shape the preferences of others through appeal and attraction, seduce rather than coerce. This decline was painfully evident long before the disastrous withdrawal from Afghanistan.
That brings us back to bitcoin, a digital, decentralized currency designed to remove central banks from the financial equation. A neat idea, no doubt. But central banks have been controlling the world’s finances for centuries. Governments won’t simply roll over and accept bitcoin without the heaviest of regulations.

The yuan appears likely to ascend in value and prestige over the next decade. As China grows in power and the United States struggles to maintain its credibility on the world stage, the digital yuan could replace the dollar.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
John Mac Ghlionn is a researcher and essayist. He covers psychology and social relations, and has a keen interest in social dysfunction and media manipulation. His work has been published by the New York Post, The Sydney Morning Herald, Newsweek, National Review, and The Spectator US, among others.
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