China's digital currency, what does it mean?

1. Coins & notes can be replaced by digital and govt now has a way to funnel cash directly to citizens, UBI style.
2. Bitcoin is not challenged much by this. It is digital gold and truly decentralized.
3. Yes it is a step away from dollar hegemony because...
4. It bypasses US controlled infrastructure, and so US no longer has control of economic sanctions.
5. It bypasses dedicated banking infrastructure, so SWIFT has become technically obsolete overnight, but wont disappear immediately.
6. Just like voice and data now flow over internet for telcos, now banking services can flow over the internet with dedicated protocols (and an app of web layer on top, just like email).
7. This means money control and creation hasn't been decentralized, but tech integration has (anyone can build a wallet, anywhere if central bank ok). This isn't DeFi.
8. Other currencies will follow suit (Euro and Dollar) because ignoring this will be like print only newspapers in the age of the Internet.
9. It doesn't mean the end of banks as their role in creating money via loans is efficient and crucial. But there will be less overhead and new infrastructure so still loads of disruption.
10. The more established and regulated existing financial services systems, the longer it will take to switch to Internet only infrastructure, so big opportunity for fintech outside of US and EU.

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