Chinas Purposes of Digital Yuan Project and its Impact over International Trade

Subject Areas : International Legal Research

Seyed Erfan Lajevardi ¹ ( International Law Department, Law Faculty, Islamic Azad University Central Tehran Branch, Tehran, Iran )
Meysam Omidi ² ( International Law Department, Law Faculty, Islamic Azad University Central Tehran Branch, Tehran, Iran )

Received: 2024-01-01 Accepted : 2024-09-08 Published : 2024-09-26

Keywords: Stablecoin, Market Economy, Internationalization of Fiat Currency, National Stablecoin, Hidden Subsidy, Digital Yuan, ,

Abstract :

China’s Purposes of Digital Yuan Project and its Impact over International Trade The money may be categorized as commodity currency, fiat money, cryptocurrency and stablecoin. The national cryptocurrency is a stablecoin. The verification of stablecoins is subject to centralized ledger. If the government pledge fiat currency to issue national stablecoin, it would be possible to control transactions of such a stablecoin. China is the first country basing the issuance of national stablecoin. The purposes of China to issue digital yuan are as follow: - Internationalization of yuan; - Governmental supervision over the domestic financial sector; - Supervision over the shadow banking system; and - Circumvention of WTO requirements through hidden loans, subsidies and also dissembling the requirements of the free market system. The Economy of Iran is not capable to internationalize Iranian Rial; simultaneously the opportunities of foreign investment are confined; therefore, the issuance of digital Rial will not be an effective measure to develop the international trade. It would be possible that the loans of China to Iran becomes paid through digital yuan. China has a monopolized access to the information of transactions made by digital yuan; therefore, resources should be consumed for the transparent and projects.

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