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U.S. Control of the International Financial System and Sanctions Overreach
The widespread use of dollars as the predominant currency in international trade grants the U.S. extensive control over the international exchange of goods and services and makes its ability to enforce sanctions particularly effective. The U.S.'s use of this economic power as leverage in geopolitical negotiations is now inspiring challenges to the current system from China, Russia, the EU, and other countries seeking to circumvent U.S. control.Challenges to the Dollar and Existing Financial Infrastructure
While there is ample evidence to suggest that a change in the near term is unlikely, ongoing efforts to undermine the U.S.’s financial advantage could significantly alter geopolitical power dynamics and weaken U.S. leverage over major powers such as China and Russia while providing countries such as Iran and North Korea new opportunities to access international trade and markets.
While there is ample evidence to suggest that a change in the near term is unlikely, ongoing efforts to undermine the U.S.’s financial advantage could significantly alter geopolitical power dynamics and weaken U.S. leverage over major powers such as China and Russia while providing countries such as Iran and North Korea new opportunities to access international trade and markets.
Domestic and International Implications of China's Digital Renminbi
The Digital Currency Electronic Payment (DCEP) is a direct digital substitute for liquid renminbi currency now in circulation. If successful, the DCEP could accelerate renminbi internationalization, strengthen China’s existing alternative financial infrastructure, and give the country a first-mover advantage in developing the underlying technology and standards for future central bank digital currencies.
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