Could China’s Digital Yuan Reduce the Use of the Dollar in International Trade?

New China is born digital yuan According to Richard Turrin, author of “Cashless: China’s Digital Currency Revolution,” will challenge dollar dominance over international trade settlements over the next decade. .

“Remember, China is the biggest trading country, and you’ll see the digital yuan gradually replace the dollar when it comes to buying from China,” Turrin told CNBC’s “Squawk Box Asia” today. Monday.

Turrin, a former banker who also worked in fintech, said: “If we go about 5 to 10 years from now, then the digital yuan could play an important role in reducing the use of the dollar in international trade.

The impetus towards alternative payment systems, he said, could come from countries’ desire to reduce their dependence “almost 100%” on the dollar.

“What you will see in the future is a rollover, a risk management exercise that seeks to slowly and possibly only slightly reduce dependence on the dollar, from 100% to 80%,” he said. , 85%.

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However, Beijing is unlikely to use the digital yuan to aid Moscow in overcoming crippling sanctions imposed by the West, according to Turrin.

Turrin explained: “The digital yuan is a kid in the experimental phase but has not been launched in the domestic market nor has it been tested on an international basis.

Technically, this means it would be “extremely difficult” for China to use its CBDC to bail out Russia. Beijing may also want to shield its “new child of the money” from the mud on the political front, he said.

“[China] finally want [the digital yuan] being widely accepted and making it a punishment now while he’s still a kid, won’t help in that end,” said Turrin.

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