OMFIF Article - Digital Renminbi is No Threat to the US Dollar

The OMFIF publishes this article which argues that the US dollar will not be significantly impacted by a so called "digital renminbi".   Below are a couple of excerpts. I added underline for emphasis.

"More than 50 years after Valéry Giscard d’Estaing lamented the dollar’s ‘exorbitant privilege’ and two decades after the euro’s launch was seen as a threat to dollar domination, the latest mutation has hit – will the digital renminbi surpass the dollar? Adding to the fog are errant questions about whether the dollar’s demise will be fast and furious, and whether it is a winner takes all hegemonic proposition.

Those arguing for a surge in the digital renminbi’s global role seem to view digitalisation as a revolution in the international currency landscape. But large global trade and capital flows already predominantly take place in digital form. Digitalising a central bank currency is not a game changer. But that doesn’t mean that the US doesn’t have much needed work to do in strengthening its payments systems."

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"The question facing the US is not how to protect the dollar’s global role. Rather, the US should focus on maintaining a healthy economy. Promoting strong economic performance, restoring buffers after the pandemic, tackling challenges and buttressing robust institutions and openness will ensure that the dollar’s vibrant global role is maintained."

Please click here to read the full article

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My added comment: While the US has vast political differences, one thing has remained constant so far. No matter who has political power, the US does in fact make every effort to "protect the dollar's global role". So far that seems to remain unchanged with the new Administration. Time will tell us if any real change does take place in that regard.