There is speculation that the Chinese digital yuan is seen as a potential rival to the US dollar as a global reserve currency. It is expected that the digital yuan will be used more widely in international trade and could potentially reduce the US dollar's dominance in the global financial system.
And another reason is to increase efficiency and reduce the cost of international trade which could be a threat to the US.
There is speculation that the Chinese digital yuan is seen as a potential rival to the US dollar as a global reserve currency. It is expected that the digital yuan will be used more widely in international trade and could potentially reduce the US dollar's dominance in the global financial system.
And another reason is to increase efficiency and reduce the cost of international trade which could be a threat to the US.
One of the biggest misconceptions is that the dollar is easy to replace as the world's reserve currency.
The problem is that the place of an international reserve currency is a very difficult status. And just one "I want", or "I have the most population" - will not give such a status to any currency. Everything here is much deeper and more complicated. Let's first understand what the world's reserve currency is. if it is very simple - it is "money over money". Now I will explain. There are a huge number of states on earth with their own currencies, and the products that their economies produce. The question is - which is better - Chinese rice A at 300 yuan per kg, or the same variety grown in India at a price of 95 rupees per kg? (the numbers are completely out of my head). The answer is (for example) - in Southeast Asia, the average price of grade A rice on the market is $5 per kg. Do you understand what it is about? It's like taking a period before money relations (barter), when you tried to compare the cost of nails with the price of a kilogram of meat. So it is in the world economy - we need some kind of unification and convenience in evaluating goods. And the second is the convenience of calculations! But the third - this is perhaps the most important thing - trust in the chosen currency. Than the dollar is supported - I hope it is not worth explaining. Does the US have any dependencies that can affect their well-being - in fact, no.
And now, on this scheme and features, impose, well, for example, the same yuan. And what will you see? First, why does the world need to switch to a new measure of evaluation? Question 2 - what benefits and convenience will the world economy receive? for example, what about the information about China's gold reserves? She's classified! Will she be declassified? Is not a fact ! Why is it hidden?
And how can China guarantee the stability of the yuan to the whole world if it is an export-oriented country and it benefits from the low exchange rate of its currency. At the same time, it is highly dependent on WESTERN investments and technologies. But at the same time, the problems in the Chinese economy have not yet fully manifested themselves, and any new problem only worsens the state of the yuan?
This is of course a very simplified explanation, I would say "childish", but the main essence is conveyed.
I will say this - I don’t even consider the EURO a replacement, although it is one of the most realistically secured and "high-quality" world currencies!