There is ongoing competition between the US and China. China has been actively trying to replace the US in global political, economic, and social areas. Recently, China has increasingly and actively increased its investments in developing countries in Africa and other regions. China has sponsored many infrastructure projects in these countries through loans, luring them to its side.
The US, on the other hand, has primarily remained passive in this competition. While not ignoring China’s active strategies, the US has not taken such an active role as we see China taking. However, people should not mistake this for weakness. We have seen the US impose trade sanctions against China and the latter responding with similar moves.
But is there a cold war involving currency between the US and China? Before answering the question, you can yuan-pay-group.net and start using the platform for Bitcoin trading. The platform is free and suitable for beginners as well as experienced traders.
Features of a Cold War
The Cold War was an unconventional war between the US and the USSR. This war did not feature the use of real weapons or actual conflicts. Instead, it was mental or psychological warfare, with each side trying to outwit the other, especially in building and expanding their nuclear weapons.
Comparing the current currency war between China and the US to the Cold War is easy. First, like in the Cold War, it involves two global powers. Moreover, China is a communist country like the Soviet Union was during the Cold War. The two powers have differing viewpoints on various issues, including governance.
Secondly, the current currency war between China and the US is not happening on the conventional battlefield. It involves strategic warfare where each side adopts different strategies to ensure it wins. Introducing the digital Yuan could be seen as one of these strategies for China. Some people could see the digital Yuan as a Cold War weapon for China.
Why It’s Not a Cold War
But viewing the digital Yuan as a Cold War weapon could be misleading. Globally, many governments, including the US, are considering the introduction of their central bank digital currencies (CBDCs). So, the opening of the digital Yuan could be part of the growing global trend with no real intentions to use it as a weapon against the US dollar.
Additionally, unlike in the real Cold War, which involved each party actively, the current rivalry between the US and China has only one active player, China. The US has primarily remained passive, with no active strategies to show it is at any currency war with China. And this might not change anytime soon, considering the current situation.
So What Is It?
If the digital Yuan is not a Cold War weapon, then what is it? Simply put, it is just one of the elements in the ongoing rivalry between the two mega powers. China is actively pushing the digital Yuan to become the dominant global currency in terms of trade and as the global reserve currency.
And this makes the relationship between the two countries more of an insurgency. That’s because it appears as if China is trying to challenge and even replace the US as the dominant player in global finance. China believes that it has what it takes to achieve this goal, hence, the active involvement with the introduction of the digital Yuan.