This video is quite interesting, former Greek Finance Minister: the US sees China as the biggest threat, because of digital RMB
Recently, a special interview with the former Greek Finance Minister was shared by many people, but I haven't watched it yet. Today, I watched it and found it quite interesting. His point is that China's digital RMB challenges the hegemonic position of the US dollar, and also explains what the hegemony of the US dollar really means.
He gave a real example: a large German propeller manufacturer that supplies parts to a shipyard in Shanghai. However, the raw materials for this German propeller manufacturer are all purchased from China, which involves cross-border payment issues. Before the emergence of digital RMB, when the German manufacturer purchased raw materials from China, it had to go through the following payment process: the money would flow from the German bank, the European Central Bank, the Federal Reserve, the Chinese central bank, and finally into the supplier's account at a Chinese commercial bank.
In other words, although it seems that the funds are transferred from the account of the German manufacturer to the account of the Chinese supplier, in fact, the funds pass through many places. At each step, a "toll" needs to be paid, which includes fees, currency exchange costs, etc. Moreover, the monitoring rights of fund flows are completely handed over to the Federal Reserve.
When the German manufacturer makes the propeller, the Shanghai shipyard purchases it from the German manufacturer, and again goes through the same process in reverse. Through these measures, the US has complete control over the direction of the world economy and controls most of the dynamics of global trade.
However, the emergence of digital RMB (including WeChat Pay and Alipay) has broken this chain. The flow of funds no longer needs to go through the Federal Reserve, and the US can no longer monitor various transaction details and dynamics through the Federal Reserve.
He also gave another example, saying that since the US froze 450 billion dollars of Russian assets, countries like Saudi Arabia in the Middle East have had to consider their own financial security. What if they have a conflict with the US in the future? How will their funds be handled? Therefore, they will definitely invest in digital RMB, even though they won't put all their money into it. However, due to risk hedging, they will already deposit some funds in China as a form of security.
All of this is possible due to several factors: first, the development of China's banking industry, and second, the advancement of China's technology. The US has always wanted to do this, but failed. This old comrade also explained: China can require banks to make concessions, because the promotion of digital RMB actually harms the income of commercial banks. In the US, the banking sector on Wall Street is unwilling to share profits with tech giants. When Google Pay was launched, it needed to pay a fee to American bankers.
Original: www.toutiao.com/article/1841216971187207/
Statement: This article represents the personal views of the author.