The Chinese digital currency or digital yuan is becoming a reality and this has prompted the US to take a closer look at it under the Biden administration.
According to Bloomberg, the White House is interested in understanding whether China could use the currency to finally attack the US dollar's position as the world's reserve currency.
The Bloomberg report hints at how the US perceives the digital yuan under its current administration.
The Treasury, State Department, Pentagon, and National Security Council are investing more time and effort into trying to understand how the currency will work and what the implications may be.
In the meantime, the digital yuan is slowly but steadily gaining momentum. There have been millions of dollars’ worth of transactions in digital yuan, which is a central bank digital currency (CBDC).
The country is forging ahead with a plan to digitalize its economy and clear all payments online as a way to counteract money laundering.
While governments were in no hurry to jump on the CBDC bandwagon originally, many are now changing their tune and exploring further opportunities for technology adoption.
Not many are as determined as China. While the US is looking at digital currencies, the country is certainly taking its time.
The digital yuan does not yet pose enough of a threat to US dollar hegemony as to prompt officials into immediate action, but they are certainly paying attention.