Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Donald Trump’s China Nightmare Is Coming True For The U.S. Dollar

Donald Trump’s China Nightmare Is Coming True For The U.S. Dollar

U.S. president Donald Trump's power struggle with China was perhaps the defining feature of his presidency, until the coronavirus COVID-19 pandemic struck. The pandemic—and subsequent lockdowns—crashed global markets and pushed investors around the world toward the safety of the almighty dollar.
But the U.S. dollar's days as the world's reserve currency could be numbered, with some of the biggest ever changes to government-backed central bank currencies looming—and China leading the field.

Casual discussions around central bank digital currencies, sometimes called CBDCs, have been going on for the last few years.

Digital currencies would work just like regular coins and notes issued by central banks but exist entirely online. Instead of printing or minting currency, the central banks would issue digital dollars via online accounts—similar to the commercial banking apps that have exploded in popularity in recent years.

Employers could, theoretically, pay directly into these government-run accounts and both online and physical stores could accept payment from them. Foreign exchange could also be handled through them, easing the flow of international trade.

The long-running debate among central bankers over the need for digital currencies was blown wide open last year by news of Facebook's libra project—something that almost saw the social media giant elevate itself to (or even above) central bank status as an issuer of the first global currency.

World leaders and regulators slapped Facebook back down.

"We have only one real currency in the U.S.A., and it is stronger than ever, both dependable and reliable," Trump said last year in a Twitter tirade against Facebook's libra, as well as bitcoin and cryptocurrencies—scarce digital assets that were the inspiration for libra.

"[The dollar] is by far the most dominant currency anywhere in the world, and it will always stay that way."

Libra is expected to launch later this year, though somewhat reduced from Facebook chief executive Mark Zuckerberg's original vision.

Some U.S. lawmakers have proposed the creation of digital dollars and so-called FedAccounts as part of stimulus bills designed to offset the economic damage wrought by coronavirus-induced lockdowns.

These have so far been excluded from final bills and may never get through a divided Congress—perhaps leaving Facebook's libra as a defacto digital dollar.

"The big battle for global financial supremacy could be between the digital yuan and Facebook's libra dollar, a digital version of the U.S. dollar," said financial author and trading veteran Glen Goodman, who made a name for himself by successfully navigating stock markets during the 2008 global financial crisis and has been closely following the development of central bank digital currencies.

"Both of these currencies may be launched as soon as this year and will make it quicker, cheaper and more efficient to buy, sell or transfer money from place to place. China will pull out all the stops to convince international trading partners to switch from the dollar to their new currency. If they manage to lure enough users, the U.S. dollar could be in deep trouble."

China is expected to begin internally testing a digital yuan with its four largest commercial banks this month and has lined up a raft of international corporate partners including coffee chain Starbucks SBUX and fast food giant McDonald's MCD .

Battle lines are now being drawn but the war could be measured in decades and not years.

"Given the risks inherent to such a transformation, China will phase in the CBDC very gradually," journalists at the widely-respected Economist newspaper wrote this week, pointing to analysis from Citic Securities that estimates it will take "several years for the digital yuan to replace just about 10% of all physical cash in China."

Donald Trump's first term as U.S. president may have been marked by his trade war with China; but if he wins a second he could go down in history as the president that saw the U.S. dollar fall from grace.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×