China’s emerging digital currency could enhance the yuan’s importance in the international financial system at the expense of the U.S. dollar and extend the Chinese surveillance state into wallets around the world.
A combination of visibility of currency users and technical control is a monetary dream for Chinese communist officials, who have staked their regime on their ability to monitor and curtail private activity within China. The digital yuan’s acceptance beyond mainland China could give the regime a significant geo-economic tool, one that bypasses the network of banks and financial institutions that are subject to U.S. laws and binds client states more directly to Beijing.
