e-CNY: Unveiling Why China’s Digital Yuan Won’t Dethrone Dollar Dominance

Key Points

1. The US dollar's dominance is supported by unmatched liquidity, deep financial markets, and strong network effects, which the e-CNY currently lacks.

2. China's capital controls and convertibility restrictions limit the e-CNY's global adoption and appeal compared to the freely convertible US dollar.

3. The e-CNY faces trust issues internationally due to concerns over government surveillance, lack of transparency, and geopolitical influences.

4. China's financial markets are less developed and less accessible than US markets, reducing the e-CNY's attractiveness as a reserve currency.

5. While the e-CNY may gain regional influence, especially through China's Belt and Road Initiative, it is unlikely to replace the dollar's comprehensive global role.