The Recent Statement on the Expansion of the Digital Yuan
The recent statement by the deputy director of China’s National Laboratory of Finance and Development, Zhang Ming, has sparked a new discussion about the expansion of the digital yuan. In an interview with Study Times, a Chinese official newspaper, Zhang detailed the need for his country to expand the reach of the digital yuan in light of the growing adoption of cryptocurrencies and recent foreign economic policies.
Criticism of US Dollar-Pegged Stablecoins
Zhang criticized the dominance of US dollar-pegged stablecoins in the digital currency market, saying they strengthen the dollar’s global dominance. He stressed the importance of strategic response: “Once the US dollar stablecoin more closely ties the US dollar’s international credit with the virtual world application scenario, it can greatly consolidate the US dollar’s hegemony.”
Remarks by US President Donald Trump
This statement comes after remarks by US President Donald Trump, who has supported dollar-backed stablecoins as a means to preserve the US currency’s supremacy in the global economic landscape. Trump has also urged Congress to legislate on the market structure of such stablecoins.
Proposal to Expand Digital Yuan Coverage
In response, Zhang proposed significantly expanding the coverage of the digital yuan, suggesting that China’s digital currency should cover everything from M0 (cash) to M1 (cash plus demand deposit) or even M2 (cash plus all deposits). “Only by upgrading the replacement scope of the digital RMB from M0 to M1 or even M2 can we comprehensively expand the application scenario of the digital RMB, promote the domestic and overseas use of the digital RMB, and help the internationalization of the RMB,” Zhang explained.
Importance of Developing Chinese Stablecoins
In addition, Zhang highlighted the importance of developing Chinese stablecoins and expanding the use of digital tokens on global platforms, linking them to the RMB sovereign credit to more effectively address international challenges.
Proliferation of Digital Currencies
He also suggested that the proliferation of various digital currencies backed by national fiat currencies would be more advantageous than letting the US dollar monopolize the cryptocurrency market. “The flourishing of various digital currencies is naturally better than the US dollar monopolizing the development path of digital currencies,” Zhang said.