Digital currencies and great power rivalry: China as a disseminator in the digital age

Abstract

ABSTRACT The United States reign as global hegemon has been empowered by massive structural power over key international economic, technological and ideological networks. As chief disseminator during the era of emerging computer technology and communications, the U.S. became a rules-maker, empowered to shape international governance in its favour. However, a new era of digitalized assets, transactions and networks will provide an opportunity for Central Bank Digital Currencies (‘CBDCs’) to constitute the technological-financial-business bones of the developing digitalized global economy. CBDCs will exert massive influence on the international economic, technological and ideological orders. Moreover, all of these impacts are inextricably connected to the hegemonic rivalry between the United States and China. Astutely, China has been developing the digital Yuan and is the first major economy to distribute a CBDC. If China's CBDC successfully migrates to external usage, and depending upon the degree of crucial Chinese domestic reforms, the digital Yuan may offer an opportunity for China to be a disseminator in the digital age. Chinese influence over global networks and governance frameworks would vest China with advantageous structural power in the economic, technological and ideological spheres – the fulcrums of the U.S.-China hegemonic rivalry.