Deutsche Bank: Digital Yuan To Challenge Dollar's Hegemony

3 min reading

According to Deutsche Bank Research, the digital yuan designed in China could seriously challenge the hegemony of the US dollar. Researchers are also of the opinion that digital payments could ultimately be the reason of the plastic card's death.

Deutsche Bank: China can dominate the global financial market

Deutsche Bank Research has published another report regarding the ways of payments in the future, digital currencies to be more specific: Digital Currencies: The Ultimate Hard Power Tool. The report focuses, among others, on the digital currency of the Central Bank Digital Currencies (CBDC) which is developed by the People's Bank of China (PBOC).

Researchers claim that if the Chinese government took a firm position on the digital yuan and forced domestic companies to adopt the currency, the dollar hegemony could be dealt a massive blow. And that is, of course, given the significant economic strength of Beijing.

"China is working on a digital currency backed by its central bank that
could be used as a soft- or hard-power tool... If companies doing business in China are forced to adopt a digital yuan, it will certainly erode the dollar’s primacy in the global financial market."

The opinion of the researchers is that the first "big" digital currency of the central bank on the market will also have a significant advantage over commercial digital currencies like, for instance, Libra developed by Facebook or any currencies of other corporations. In contrary to central bank digital currencies, private digital currencies lack regulatory approval and are, therefore, significantly weakened.


The end of "plastic", the survival of cash

When discussing the future of payments, people usually say that the end of cash is imminent. Deutsche Bank's researchers, however, have a different view on this subject. Even though the development of payment digitization is rapid, the experts think that cash payments will remain popular for decades. They add, though, that the emergence and further development of digital payments will ultimately lead to the "death" of payment cards.

"While cash will stay, the coming decade will see digital payments grow at light speed. That will lead to the death of the plastic card."

- write experts in the report, adding that in developing countries a great number of customers switch directly from cash payments to mobile payments, without even having a plastic card.

What is interesting is the fact that the publication praises in particular central banks and strict regulations and at the same time criticizes cryptocurrencies, especially those ensuring greater anonymity.

"Specifically, private cryptocurrencies
 significantly increase the risk of financial crime. We expect that technological solutions and regulation will evolve to sufficiently address this concern."

- said the experts and add that cryptocurrencies are required to become legitimate in the eyes of both the governments and regulators.

Waluta Kurs Dokonaj zakupu

Dear customer,

We use cookies to provide our services correctly and safely. Cookies are small text-based data sets that shall be saved on the device you are using in connection with the use of this instnat website. Cookies are created in order to ensure proper functioning of thes instant website. By clicking the button "I accept and go to the website", you implicitly agree to creation of the cookies on your computer and to deploy automatic tracking and data collection and processing on behalf of the Tokeneo TEO OU. Click the above-captioned button is also tantamount to accepting website's privacy policy. Closing the notification by means of "X" is unequivocally connected with your consent. If you do not agree to any of the above, please discontinue using our Website.

“Cookies” shall make an identification of the software used by you and to customization of this instant website to your needs. Cookies contain the name of the domain from which they origin, duration of period of their storage on your computer and an assigned value.

Third party cookies:
We also use third-party cookies for the following purposes:

  • creating statistics - helping to understand the way Users use the Website, which allows to improve its structure and content with use of the analytical tools
  • defining a user profile - in order to display custom-tailored content in advertising networks.

External entities that might be source of any third-party cookies on this instant Website are as follows:

Using a settings of your web browser or by using pre-set configuration tools available in our service you can independently and at any time change the settings concerning your use of the “cookies”, specifying the conditionsof their storage and how your device is creating and downloading them. These settings can be changed to block the automatic handling of cookies in the settings of your web browser or inform about their placement on your device each time.

Detailed information about the options related to use of “cookies” is available in the settings of your software (web browser).

Service privacy policy

This instant document lays out the principles of the Privacy Policy on the tokeneo.com/news/pl website (hereinafter referred to as the "Website" or "Service"). The administrator of the Website is TOKENEO TEO OÜ (an Estonian law limited liability company) with its registered offices in Tallinn (in the province of Harju Maakond), at 19-7K Maakri Street (in the district of Kesklinna Iinnaosa), 10-145 Tallinn, Estonia, registered on 21.12.2018 in the Estonian Business Register under number 14630242, using the EU VAT number: EE102149487.

The full document to read the Tokeneo privacy policy is available in this document.

Advanced settings can be changed in your browser.