Banking executive Hiromi Yamaoka believes the conflict in Ukraine could affect the central bank digital currency (CBDC) policy globally. The former head of the payments and settlement department at the Bank of Japan sees countries like China exploring CBDCs to counter US dollar dominance.
Ever since Russia invaded Ukraine in its "special military operation", US-led world powers have imposed severe sanctions. Most of these sanctions have cut the country's access to foreign exchange, making it impossible to make US dollar deals.
According to Yamaoka, sanctions using financial infrastructure should not be abused to maintain effectiveness. He added that the most effective and powerful weapon was the freezing of Russia's foreign reserves.
Yamaoka continued that these sanctions have shown the effect of politics and national security on global financial infrastructure. Seeing how much power Western countries wield with this sanction, China could promote its digital yuan as an alternative currency for cross-border settlements.
Yamaoka said China could "create a currency bloc" and from now on, "defense and national security will likely become key issues when discussing CBDC." His statement echoes China's intention when it created the digital yuan. One of the main goals of the digital currency was to help the Asian countries increase transactions in Chinese yuan rather than US dollars.
It was presented to an international audience during the Winter Olympics and has already been used by over 260 million people in the country. Other nations, including Russia, also worked on a national digital project. At a time like the one we are experiencing, the most powerful countries can now see CBDC as an integral part of their financial freedom from the West.
The International Monetary Fund (IMF), in one of its previous reports, had stated that the Chinese yuan had the potential to facilitate cross-border payments, especially if the country can reach an "agreement with foreign jurisdictions".
Seeing the level of success China enjoys with its CBDC project, the US government, through its recently signed executive order, has also shown a willingness to maintain US dollar dominance in international transactions by working on a digital version.. According to the available information, several federal agencies in the United States, along with congressional lawmakers, have studied how a CBDC project would affect the country's economy and what weight it would have as a world reserve currency.
COMMENT. Remember that the block-chain system is a system of false democracy. There are equal conditions between the nodes, but it is like arguing that the Knights Templar were democratic because they shared food and property. Now mining is reserved for a few supercomputer owners. The common citizen who buys cryptocurrencies has infinite possibilities of being scammed, from the Ponzi method to the theft of badly invested money. Combining an anarchist system with a state system is impossible. This is demonstrated by Meta (Facebook) who has given up on launching its cryptocurrency. So we hope that the world will realize the validity of the proposed exhibition of digital currency that respects the canons of the CBDC.