- 1. COVID-19 gained our notice from around the world and caused havoc. Originating in China, this illness now has our utmost attention.
- 2 . At the end of 2019 and 2020, China announced its intention to be the first country to issue a sovereign digital currency. The currency will help China turn the yuan into an international currency. Doing so, the Chinese digital currency will avoid dollar transactions and thus evade U.S. financial institutions.
- The United States will no longer turn to sanctions as one of its primary means of responding to threats.
- The United States will no longer be the world financial power.
Did China plan to weaken the world's health and economy while also launching a digital currency. Is this in order to become the World Dominate?
The U.S government is in a trade war with China for good reasons. It looks as if Europe woke up. Last week, seven major central banks, including the U.S. Federal Reserve and the Bank for International Settlements (BIS), released a first-of-its-kind report that outlines a set of digital currency principles in issuance of a global central bank. The cooperation of the central banks is an effort to cope with several international countries' progress, especially China, in developing a sovereign digital currency, alongside leading projects in the private sector, such as Facebook's Libra organization.
Meanwhile, the Bank of Japan announced today that it would begin examining how to operate its digital currency next year. This announcement is in line with the policy recently announced by Yoshihide Soga, Japan's new Prime Minister, which will promote digitization and administrative reform to strengthen Japan’s competitive economy.
The report on sovereign digital currencies was written by the Central Banks of Canada, the United Kingdom, Japan, the European Union, the United States (Federal Reserve), Sweden, and Switzerland, together with BIS - an international organization of central banks. They define the basic principles needed to help banks meet their public policy objectives.
The report sets out three fundamental principles for each digital currency:
- 1. A sovereign digital currency is "coexistence with cash and other types of money in a flexible and innovative payment system"
- 2 . Any launch (of digital currency) “should support broader policy objectives, and not undermine monetary and financial stability"
- 3 . Features (digital currency) “should promote innovation and efficiency”
These principles have shown that the Central Bank Group has the core features for any future sovereign digital currency system. According to the report, "flexibility and security to maintain the operational integrity" of the digital currency is a necessity along with the "Convenience and availability, at a low cost or free of charge for end-users". They will rely on appropriate standards and a clear legal framework. To be clear, any digital currency requires an "appropriate role in the private sector as well as in promoting competition and innovation."
"Proof of international cooperation."
Christine Lagarde, President of the European Central Bank (ECB) chaired the meeting and report. According to Lagarde, "While technology is changing the way we pay, central banks have a responsibility to protect people's confidence in money.
According to the BIS announcement, the group of central banks that participated in the report "will continue to work together on digital currencies, without pre-determining any decision whether or not to issue CBDCs in their jurisdictions." Accordingly, "Future activities will include an examination of further open questions concerning sovereign digital currencies and the challenges of cross-border payments, in addition to continuing local assistance and activities with other central banks to encourage intelligent dialogue on key issues.”
Will people use it?
No one knows. The digital wallet is just a wallet, allowing people to pay for some retail services. How it will work is unclear. It isn't easy to estimate the digital currency's impact on its business, but it looks like we'll face a new world order in the next 10 years.