Today, the relationship between China and the United States is one of escalating competition. On Oct. 23, 2019, Facebook (NASDAQ:FB) CEO Mark Zuckerberg testified before the U.S. House Financial Services Committee on Libra. Zuckerberg and members of Congress had much to disagree on. One consensus that did emerge, however, was concern regarding China’s digital currency project. Zuckerberg noted:
Building on this, the U.S. Senate Banking, Housing and Urban Affairs Subcommittee on Economic Policy recently discussed the need for a digital dollar as a response to China’s growing economic influence. Similarly, Huang Qifan, vice chairman of the China Center for International Economic Exchanges — a leading think tank backed by the Chinese government — claimed five days later that the Chinese government-led CBDC project, referred to as the Digital Currency Electronic Payment, or DCEP, would replace the SWIFT international financial messaging and payments system, describing it as a tool for the U.S. to exercise its global hegemony.
- Reducing the use and holdings of the dollar domestically and internationally.
- Undermining the Federal Reserve’s ability to conduct monetary policy and posing unforeseen systemic risks.
- Limiting the U.S. government’s ability to impose economic sanctions against adversaries such as Iran and North Korea.
- Working together to design CBDC frameworks and cybersecurity standards that maintain financial stability.
- Designing tests with private-sector companies that ensure data protection in a world that is beginning to reject unregulated, invasive technology.
- Integrating payments systems across large private-sector players.
- Assessing financial inclusion opportunities by working directly with people and organizations from marginalized communities.
- Determining how to protect consumer privacy in the context of national security interests.
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