CBDCs around the world have been appreciated but the recent appreciation was seen coming from the Brazilian Communist Party. The political party while appreciating the newly developed Chinese CBDC i.e. digital Yuan not only appreciated China but also stated that paper money was originally invented by the Chinese people and they will be the ones offering paper money’s last prayers. The party added that the Chinese CBDC is equipped to bring about a global change in terms of financials and national economies.
Brazilian Communist Party has been operating an official news and update portal under the name “Vermelho”. The portal has recently published an article that China has outperformed every other nation in the field of developing its official CBDC. The port also suggested that China’s economy is currently bigger than any other economy in the world.
Vermelho claimed that the digital currencies that have been available in the market could not be benefitting as that of a CBDC. This is so because, the facilities of intermediaries, such as commercial banks, will be available to CBDC. On the contrary, there will not be any such facilities available to digital currencies.
Similarly, a central bank would overall be in charge of CBDC therefore each transaction would be monitored and supervised by the central bank itself. The political wing said further that through CBDCs there is going to be a healthy relationship between the public and the regulator. With the help of this healthy relationship, the governments would be able to make sure that the citizens are given the upfront. For instance, if someone is in direct need of government financial aid, then the funds can be sent immediately on an emergent basis. In addition, in the case of pension or salary transfers, CBDCs can play a major role, said the political wing.
The article further spoke about the end of the US Dollar’s dominance within the global market. It claimed that CBDC is equipped to bring out geopolitical changes, which will ultimately end the US Dollar monopoly. The political wing further elaborated that currently 88% of the trading and financials of the global world are done based on the US Dollar. However, if the digital Yuan were being used for conducting global transactions then it would be the end of the US Dollar’s dominance.
Usual practice if a cross-border transaction is carried out then that transaction is done based on Dollars. Not only the transacting banks are earning through the transaction but the US too is also acquiring its share as well. One cannot even imagine how much money the US is making on daily basis. However, in case the monopoly of the US is curtailed, then of course the US will have to lose humongous monies. Keeping in view the ongoing rivalry between China and the US, obviously, China will not let go of the opportunity.
