Chin’s CBDC expansion seems to be reshaping global trade networks, leaving Australia at a crossroads between Beijing and Washington.
U.S. President Donald Trump’s decision to ban a U.S. digital dollar could shake up global finance, as the West is already falling behind on digital currencies, says Marina Yue Zhang, an associate professor at the University of Technology Sydney.
In her op-ed on a book by a British-Swiss author and financial economist, Zhang highlights that the U.S. is caught in political debates over digital money. Some lawmakers aim to block a digital dollar due to privacy concerns, while Europe and the U.K. are seeking a compromise.
Data from the U.S.-based Atlantic Council think tank shows that as of September 2024, 134 countries all over the world were one way or the other studying central bank digital currencies, up from 35 in May 2020. The data also shows that over 65 countries, including India, Australia, and Brazil, are in advanced stages of CBDC exploration, whether in development, pilot, or launch phases.
And yet, Australia still has to make any concrete plans for a central bank digital currency as the country’s economy heavily relies on exports, especially to China.
“If China continues to advance CBDC-based trade settlements, Australian exporters could face pressure to adopt Beijing’s financial infrastructure. This would raise concerns about Australia’s economic sovereignty and geopolitical leverage.”
Marina Yue Zhang
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Zhang notes that Trump’s move could make the gap between the U.S. and its allies even larger when it comes to digital finance. The shift away from the U.S. dollar has already been gaining momentum since 2022, as many countries are now exploring multi-CBDC platforms to reduce their dependency on Western financial systems.
“How do multi-CBDC platforms provide emerging economies with an alternative to Western-dominated financial systems? They streamline trade and reduce reliance on traditional financial infrastructure and reserve currencies.”
Marina Yue Zhang
Zhang notes that countries like Russia and Iran were cut off from SWIFT in recent years, but CBDC networks “allow nations to bypass traditional financial infrastructure and reduce reliance on the U.S. dollar in cross-border trade.”
While Western governments are still wary, concerned about government overreach and digital money being used to control transactions, Australia, Zhang points out, still has to find a way to stay ahead in digital finance without getting stuck in global power struggles.
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