While those countries that have already introduced a central bank digital currency (CBDC) might carry little political weight, also the world’s major economies are discussing and testing their own CBDCs. This episode of Digitalgelddickicht sheds light on the special features of CBDC projects in the USA, Russia and China and asks about their geopolitical potential: What goals are Washington, Moscow and Beijing pursuing with their CBDCs? And are the Digital Dollar, Ruble or Yuan capable of changing the global financial landscape and currency hierarchy? How advanced are the respective CBDC plans and what lessons can the EU learn for the digital euro?
First, the episode examines the US debate regarding a Digital Dollar. How does the dominant role of the US in the international financial market influence the debate on the US CBDC? And how does the global hegemony of the dollar affect the CBDC ambitions of other G20 countries, especially in times of conflict? The digital ruble is part of a package of Russian measures designed to make the Russian payment system more resilient in the face of Western financial sanctions since the occupation of Crimea and, in particular, the war of aggression against Ukraine. As alternative financial infrastructures, CBDCs can offer greater autonomy and bypass established financial links. A look at China’s experiments with the digital yuan shows how it fits into the Chinese payment landscape. In view of China’s growing power, the question arises as to whether and how CBDC pioneers such as China could also gain influence and set standards outside their borders.
Guests
Dr. Jiaying Jiang is an Assistant Professor of Law at the University of Florida Levin College of Law. Her research focuses on the policy and regulatory aspects of emerging technologies such as artificial intelligence, FinTech, blockchain technology, central bank digital currencies and cryptocurrencies. As a Hauser Global Fellow at New York University School of Law from 2020 to 2022, she co-directed a project on central bank digital currencies in partnership with the Paul Tsai China Center at Yale Law School.
Roxana Ehlke Roxana Ehlke is a research associate at the Institute of Sociology at the University of Giessen a research associate and works in particular on topics of international political economy. She conducts research in the sub-project Financial Infrastructures and Geoeconomic Security in the SFB Dynamics of Security and focuses on infrastructural changes in the Russian financial system, especially under the influence of financial sanctions.
Further Information und Sources
Atlantic Council Central Bank Digital Currency Tracker: https://www.atlanticcouncil.org/cbdctracker/
CBDC Tracker: https://cbdctracker.org/
Text
Bansal,Rajesh / Singh, Somya: China’s Digital Yuan:An Alternative to the Dollar-Dominated Financial System, Working Paper, August 2021, Carnegie Endowment for International Peace, August 2021.
CBDC Anti-Surveillance State Act, H.R.5403, 118th Congress (2023-2024).
Chorzempa Martin: Why Chinese Fintechs Have Failed to Reshuffle International Finance , Institut français des relations internationales (IFRI), 4 Marc 2024.
Chorzempa, Martin: Overuse of financial sanctions risks dollar’s role, East Asia Forum Quarterly, April – June 2023, pp. 17-19.
Duffie, Darrell / Economy, Elizabeth (Hrsg.): Digital Currencies. The US, China and the World at a Crossroads, Stanford: Hoover Institution Press, 2022.
Ehlke, Roxana: Alternative Financial Infrastructures in Russia, Preprint Version, forthcoming in: Carola Westermeier, Malcolm Campbell-Verduyn, Barbara Brandl (eds.): The Cambridge Companion to Financial Infrastructure .
Ehlke, Roxana / Salzer, Tim / Westermeier, Carola: Increasing State Capacity through Central Bank Digital Currencies. A Comparative Account of the Digital Yuan and Digital Ruble, Preprint Version, forthcoming in: Andreas Nölke, Johannes Petry (eds.), State, Capitalism and Finance in Emerging Markets: Between Subordination and Statecraft, Bristol University Press.
Hilpert, Hanns Günther: Chinas währungspolitische Offensive. Die Herausforderung der Internationalisierung und Digitalisierung des Renminbi, Stiftung Wissenschaft und Politik, SWP Study 9, Berlin, March 2024.
Kühnlenz, Sophia / Orsi, Bianca / Kaltenbrunner, Annina: Central Bank Digital Currencies and the International Payment System: The Demise of the US Dollar, in: Research in International Business and Finance, Volume 64, Special Issue: The Impacts of Central Bank Digital Currencies, January 2023.
Kumar, Ananya / Lipsky, Josh: Don’t let the US become the only country to ban CBDCs, New Atlanticist, 21 May 2024.
Salzer, Tim: A Short Infrastructural History of Currency Digitalization in the People’s Republic of China, 2000s-2020s, Preprint Version, forthcoming in: Carola Westermeier, Malcolm Campbell-Verduyn, Barbara Brandl (eds.): The Cambridge Global Companion to Financial Infrastructures
Reuters: Russia plans to use digital rouble in settlements with China, says lawmaker, 26.September 2022.
Audio
Penta Podcast “What’s at Stake”: Digital currencies and geopolitics with Ananya Kumar, 2 May 2024.
Trade Talks – Podcast: Episode 174 mit Martin Chorzempa: The Incredible Rise of Chinese Fintech, 18 Dezember 2022.
Wurzel, Steffen: Chinas Umgang mit Techkonzernen – Ende des Kuschelkurses, Deutschlandfunk Kultur, Zeitfragen, 21 June 2021.
Video
Austrian Central Bank (ÖNB): Panel Discussion The Geopolitics of Central Bank Digital Currency, Youtube, European Forum Alpach 2024, 27 August 2024.
ABC News, Australia: China’s Digital Currency Revolution, Youtube, 6 July 2023.
Wall Street Journal: China Rolls Out Digital Yuan for Foreigners at the Olympics, Youtube, 17 February 2022.
CNBC: Could China Dethrone the US Dollar with a Digital Yuan?, Youtube, 25 July 2021.
Bloomberg Quicktakes: Trying China’s Digital Yuan e-CNY, Youtube, 19 February 2022.
Yahoo Finance: How China’s digital yuan will be used at Beijing’s Winter Olympics, Youtube, 31 January 2022.
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