Leading yuan... China just created its own digital currency: the digital yuan (#digi-yuan). It's the first major world economy to launch an e-currency. China isn't just putting cash into a virtual bank account — it's minting cash digitally, turning legal tender into lines of code. For each digi-yuan it issues, it essentially cancels a paper yuan.
More money control... more control. Beijing is testing digi-yuan expiration dates that could encourage people to spend within a certain time frame (to support economic stimulus). China uses hundreds of millions of facial recognition cameras to surveil and fine citizens for things like jaywalking. With digi-yuan, it could automatically draw the fine money from people's accounts.
Digi-yuan = a threat to the US dollar.... The USD is currently the Superman of global currency. Its stable and reliable rep has made it the world's "reserve currency" for international purchases (think: Canada buying oil from Mexico... in US dollars). The USD is used in 88% of foreign exchange trades — the yuan is used in only 4%. That global currency power makes US sanctions a nightmare for countries and individuals who get frozen out. Now that China is positioning the digi-yuan for international use, that could present an attractive alternative to the USD for sanctioned countries.... And for billions of low-income workers who don't want to pay fees when they transfer money to family abroad.