Crypto Council for Innovation (CCI) CEO Sheila Warren believes that the technologies accompanying the digital yuan could undermine the hegemony of the US dollar.
Sheila Warren, formerly head of blockchain and distributed ledger technology at the WEF, said the digital yuan will not be able to significantly impact retail payments in the US. However, she noted that the technologies accompanying China’s state digital currency could have a negative impact on the global dominance of the US dollar.
Warren added that the US Federal Reserve could take a “drastic step” in preserving the dollar’s role by issuing its own digital currency with wholesale use cases. That being said, seeing China’s rollout of e-CNY could help set the standard for retail payments, whether or not other countries adopt the national digital currency.
“American exceptionalism is no longer something we can cling to. Not with the growth of what is happening in Asia, Africa and around the world. Innovation will flow where it can thrive, and active attempts to block it will encourage it to move to other regions,” Warren said. “These things will be built. The question is where do we want them to be located geographically and within what legal, regulatory and socio-cultural systems.”
The CCI CEO noted that certain regions of the United States, including Miami, Austin, and areas of Colorado, are adopting innovation-friendly regulatory and business models. According to Warren, US President Joe Biden’s decree to create a regulatory framework for cryptocurrencies could be a “mass engine” of jobs and innovation.
Senator Pat Toomey is of a similar opinion, saying in February that the digital yuan threatens US national security. Analysts at the American consulting company Oliver Wyman suggest that the launch of the digital yuan could affect the SWIFT international banking system and banks outside of China.
However, professor of trade policy at Cornell University and senior fellow at the Brooklyn Institute Eswar Prasad (Eswar Prasad) believes that the digital yuan will not be able to replace the dollar as a reserve currency.
