Analysis of the Path and Countermeasures for the Central Bank's Digital Currency to Boost the Internationalization of the RMB

Abstract

In order to meet the needs of China's economic development and international trade, and to prevent potential risks arising from the international monetary system dominated by the US dollar, China officially began the process of RMB internationalization in 2009. However, in the process of development, it faces obstacles caused by factors such as US dollar hegemony and limited financial openness in China. In recent years, China has further developed the internationalization of the RMB and achieved significant results. Among them, the issuance of the Central Bank's Statutory Digital Currency (DC/EP) in 2020 has brought a new upgrade to the RMB. As an emerging circulation method, the digital RMB has the advantages of efficiency, convenience, centralized management, and information recording, bringing a new development to the internationalization of the RMB. It can be foreseen that with the development of China's economy and technology, the digital RMB will play an important role in future development. This article aims to analyze the current development status of RMB internationalization, explore the opportunities and challenges brought by the issuance of legal digital currency by the central bank to the development of RMB internationalization, and propose corresponding countermeasures and suggestions.