With such a high amount of progress and development taking place in the cryptocurrency and blockchain industry, many countries have started performing tests and research to integrate the blockchain technology into their financial as well as other sectors. With this much acceptance rate in the entire world and adaptation of the digital currency and blockchain industry, the concept of the dollar being overtaken by a new favorite and ruling currency is becoming clearer and many countries are closely monitoring this.
CBDCs are mainly known to facilitate in the internal economic matters, however, there are some projects currently being run by the CBDCs that observe and monitor trades within a specific region, and facilitate in providing a solution to the greenback through a digital alternative method. One of the best solutions offered were the cryptocurrency, proposed by East Asia at the start of June 2020. Apart from the cryptocurrency that was offered, there were currencies such as the South Korean Won, Japanese Yen, Hong Kong dollar, and Chinese Yuan, which backed up the cryptocurrency.
Based on the above list of the currencies backing up the East Asian cryptocurrency, the entire economic community of traders and analysts are found asking the same question, whether the CBDCs are capable enough to beat the dollar or they are only better off operating in the local markets.
When it comes to USD, the stats completely clear out any possibilities of CBDCs beating the economic giant. The main reason why it is almost impossible for any currency or financial asset to defeat the USD is that 61% of the entire world’s trades are under the rule of USD, meaning that 61% of the foreign exchange reserves currently flowing throughout the world are held in the United States dollars. Not just this but the imports and exports taking place across the borders are finalized in the United States dollars.
One such prominent example is one of the economic giants, India whose 86% of the imports are paid with United States dollars.