The billionaire investor Ray Dalio believes China’s digital yuan will outpace the efforts of the United States dollar and its goals to create a central bank digital currency as we can see more in our latest Crypto news today.
In an interview with CNBC, the Bridgewater Associates founder shared his opinion of the issuance of the digital dollar and a central bank digital currency and said that it will certainly have its uses and be viable but according to him, it will not be the most competitive one. Ray Dalio believes that China’s digital yuan will outpace the dollar as it will be more competitive in terms of value and use:
“I think we’re going to enter a world in which people will be thinking which currency, and the ones that have the best fundamentals will be the ones that will be the most competitive and that’ll be threatening to countries.”
The reasoning for this was the expectation of China’s economic growth that is still outpacing the US economy and will even further if the yuan becomes more internationally accepted with a healthier interest rate environment:
“I think you’re going to see the renminbi become more significant… a strong currency, a stable currency, more attractive-returning currency, and also a more widely used currency in the years ahead.”
As blockchain technology continues to cut a bigger hole in the financial systems worldwide, governments will turn to central bank digital currencies even more. Economic powers like the US and China are the two countries that started experimenting with their own digital currencies but that is not to say that smaller countries already implemented a functioning CBDC into their economies. While the US dollar still acts as the single biggest reserve currency, Dalio expects the Yuan’s share will increase by 15% in five to ten years. As per the International Monetary Fund, China’s national currency is far behind the Euro, the British Pound, and the Japanese Yen.
Dalio commented that he awaits for China’s digital yuan to one day to compete with the dollar but despite the Chinese efforts to ban crypto, the digital yuan will not dominate the crypto markets:
“Nothing ever completely takes over anything.”
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