The digital yuan could affect the international settlement system
19.05.2021 | auglovoi
Experts from the consulting agency Oliver Wyman conducted a study on how the digital yuan could affect the international banking system and the SWIFT processing center. According to the analysts, the digital version of China’s national currency has the potential to revolutionize the world of international payments forever.
The single standard and high compatibility with existing payment systems will allow it to quickly win its place in the trade and cross-border turnover of the Celestial Empire. Lower transfer fees will allow the new currency to be used not only for large transactions but also for retail trade. It should also be remembered that China, as one of the world’s leading exporters, is able to reach an agreement with many countries on settlements in its own national currency. The liberalization of economic relations allows us to talk about the stability of financial ties and high trust in the actions of the authorities.
Thus, although in the long term, the digital yuan can cause irreparable damage to the system of international settlements SWIFT, reducing their share of commissions for cross-border transfers. Also, international banks will have to take care to constantly maintain the necessary level of liquidity to meet the demands of their large customers.