Fintech Beat Could a CBDC topple the US dollar? Ep. 51
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May 12, 2020 
Barry Eichengreen, a renowned economist from UC Berkeley, delves into the potential challenges to the US dollar from digital currencies like the digital Euro and yuan. He discusses the historical evolution of money and how technological advancements are reshaping financial landscapes. The conversation highlights concerns about financial stability related to the Libra project and explores the broader implications of central bank digital currencies. Eichengreen paints a picture of a competitive monetary future influenced by both state and private sector innovations.
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State vs Technology in Money
- Technology drives changes in money but states push back to maintain control for resources like seigniorage.
- Over time, states centralize money control to offer uniform, convenient currency benefiting economic order.
CBDC Impact on Currency Dominance
- Central bank digital currency (CBDC) allows retail accounts at central banks but mostly benefits countries trying to boost their currency's international role.
- For dominant currencies like the US dollar, retail CBDC won't significantly change cross-border currency use.
China's Digital Yuan Ecosystem
- China aims to build a digital renminbi ecosystem beyond just currency digitization to boost its attractiveness.
- This ecosystem approach includes financial assets and regulatory controls to promote safe, compliant transactions.