Digital Fiats Will Help Us De-Dollarize, Claims Chinese Academic

Digital currencies will help China and its allies de-dollarize, a leading Chinese academic has claimed, as the nation continues to make CBDC progress.

The comments came from Huang Qicai, the Deputy Director of the Fujian Academy of Social Sciences in an opinion piece for Guangming Daily.

The column was republished by the People’s Daily, the official newspaper of the Chinese Communist Party.

Huang wrote that “the process of de-dollarization” was already underway in many nations.

He said this would eventually result in “world currency multi-polarization” as nations look to de-couple from the USD.

China’s De-Dollarization Plan: The Role of Digital Fiats

The academic said this would be “a long-term process,” but claimed that digital fiats, such as China’s digital yuan, would likely play a role.

He wrote that “international digital currencies” could “play” an “innovative role” in de-dollarization.

The academic explained:

“As digital currency applications continue to mature, a super-sovereign ‘world currency’ may appear in some form. This could become the new center of the international monetary governance system.”

But Huang stopped short of directly suggesting that the e-CNY could, or should, perform such a role – although his article did make note of the BRICS payment platform BRICS Pay.

BRICS Pay is an in-development digital payments platform.

Its masterminds claim that the platform will be both digitized and decentralized.

It remains to be seen if BRICS member states will seek to integrate their CBDC projects with BRICS Pay.

But the likes of China, Russia, and Brazil have made notable progress with their respective digital currency projects.

ICYMI: The G20 and United Nations, which hold summits this month, are broken. The expanded BRICS is a motley crew. The Group of Seven has shortcomings but it has the potential to keep peace and protect the planet, says @Hugodixon https://t.co/SBjhLtFuq0 pic.twitter.com/Y5qrNNMCTL

— Reuters Breakingviews (@Breakingviews) September 10, 2023

And Huang suggested that CBDCs could indeed play a role, provided interoperability issues could be addressed.

He wrote:

“Bilateral or multilateral cross-border transactions could be realized through the digital currency bridge projects.”

Huang also wrote of the importance of “breaking down” the SWIFT bank messaging system “dominance” that is “controlled by the United States.”

He claimed it was “necessary” for Chinese allies to “vigorously promote the process of de-dollarization in key areas such as energy and commodities.”

China, Europe should 'unite and co-operate', Premier Li says at G20 https://t.co/9zkoF5z549

— Reuters China (@ReutersChina) September 10, 2023

The academic claimed this could be achieved via “currency swaps,” and said that the “use of local currencies and the yuan for settlements with commodity-producing countries” would help “gradually loosen” the “bond” between oil and the US dollar.