00:00For years, the world has watched China develop its digital currency, the ECMI.
00:04A tool of state power, designed for control and efficiency within its borders.
00:08But now, a new report suggests a second, more flexible digital weapon is being prepared.
00:13This one isn't meant for buying groceries in Shanghai, it's meant for buying oil in Riyadh and machinery in Berlin.
00:18China isn't just building one digital yuan, it's building two.
00:22First, let's be clear about the digital yuan, or ECMI.
00:25This is not a cryptocurrency.
00:26It is a central bank digital currency, or CBDC, issue directed by the People's Bank of China.
00:32Think of it as digital cash.
00:35It's fully centralised, every transaction is visible to the government, and its primary goal is domestic.
00:40It modernises the payment system, makes it more efficient, and, crucially, helps the Chinese government maintain absolute monetary sovereignty inside its country.
00:48It's the digital reinforcement of the Great Wall around China's financial system.
00:52But the new story, broken by Reuters, is about something different.
00:55This isn't about the state issuing currency.
00:58This is about the state asterisk authorising asterisk private companies like tech and financial giant Sand Group and GD,
01:03come to issue their asterisk and asterisk digital tokens.
01:06These would be stablecoins, fully backed by yuan held in reserve.
01:10Their nature is fundamentally different.
01:12While ECNY is a tool for control, these stablecoins are designed to be tools for asterisk expansion asterisk.
01:16Their purpose is international, to facilitate cross-border trade, simplify exports, and plug into the world of digital finance beyond China's firewall.
01:25They operate under regulatory oversight, but they offer the flexibility that purely state-run money never could.
01:30So, is this a competition?
01:31Is the PBOC being challenged by its own private sector?
01:35Almost certainly not.
01:36This is a classic one-two-punch strategy.
01:39The ECNY secures the home front.
01:41It ensures the government's grip on the domestic economy is tighter than ever.
01:45Meanwhile, the private stablecoins are the expeditionary force.
01:47They allow the yuan to travel and compete internationally without forcing China to relax the strict capital controls it has on its domestic financial system.
01:55It's a way to promote the global use of the yuan and reduce reliance on the US dollar in trade, all without risking financial instability at home.
02:02One digital currency for control within the fortress walls.
02:06Another for projecting power beyond them.
02:08One is issued by the state for this state.
02:10The other is issued by private companies for the global market, but with this state's explicit permission and guidance.
02:15Together, they represent a sophisticated and multi-layered strategy to define the next chapter of digital money.
02:21And China is betting that both will make the yuan a currency the world can't ignore.
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