China’s digital yuan has been ranked as the third most mature central bank digital currency, according to a recent PwC report, as the country eyes a roll-out during the Winter Olympics in Beijing next year.
China ranked third behind the Bahamas at the top followed by Cambodia, according to the report which noted that over 60 central banks are now exploring digital currencies.
«[Central bank digital currencies] will contribute significantly to the modernization of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure,» PwC said.
«They will generate numerous opportunities for further digitization in both corporates and financial institutions, as their integration in payment and financial infrastructure progresses.»
EM Versus DM
According to the report, emerging economies have been more actively pursuing retail projects given the importance of financial inclusion. This contrasts with that of advanced economies which are more focused on interbank or wholesale applications.
23 percent of retail projects have reached the implementation stage while 70 percent of wholesale projects are running pilot programs.
Digital Boost for Reserve Status?
Recently, there has been increasing rhetoric about the rise of the yuan and its potential challenge to the dollar as the world’s reserve currency.
Templeton Global Macro's chief investment officer Michael Hasenstab said China’s aggressive pursuit to launch its digital yuan, alongside other factors, could «hasten the acceptance of the renminbi as the main rival to the U.S. currency».
Morgan Stanley’s chief economist and global head of economics Chetan Ahya similarly said in a recent note that international acceptance of any central bank digital currency could enable it to enjoy a position «similar to the U.S. dollar’s privileged role today».
