Recently, there is news that the central bank's digital currency has been undergoing internal testing and is expected to be officially launched by the end of this year. If all goes well, our country will become the first country to launch a digital currency in the century, which will make the RMB occupy the currency market in the digital era.

Taking the lead is of great significance for us to expand the influence of the RMB in the world, but it will take some time to replace the US dollar as an international currency. It mainly depends on whether our country's comprehensive national strength can surpass the United States.

First, how did the U.S. dollar become the world’s currency?

As early as after World War II, the United States became the world's most powerful country. Relying on its strong economic and military strength, the US dollar replaced the British pound as the world currency.

In other words, before the US dollar, the international currency was the pound sterling.

This means that the United States was the first world power at that time. This power does not refer to any one item such as economy or military, but to comprehensive national strength, including economy, science and technology, military, culture, education, etc.

It’s not enough to be ranked first in the world in just one category.

As early as the end of the 19th century, the economic aggregate of the United States surpassed that of the United Kingdom. However, it would not be until 50 years later that the United States would become the world's most powerful country. Only then would the US dollar completely replace the British pound as the international currency.

In fact, China has been internationalizing the RMB since 2007. After more than ten years of hard development, the RMB has become the third largest currency in the Special Drawings of the International Monetary Fund. At the same time, China's capital projects are also being further opened up.

For example, foreign capital is allowed to invest in the A-share market through QFII and RQFII, and restrictions are relaxed. China has also opened free trade zones in Shanghai, Hainan and other places. More importantly, we have also established RMB-denominated oil in Shanghai.

futures market.

Recently, dozens of countries have proposed using the RMB as a reserve currency.

If the RMB is digitized again this time, it will be very helpful to promote the internationalization of the RMB.

Although the digitization of the RMB can promote the internationalization of the RMB, there is still a long way to go before the RMB can replace the US dollar and become an international currency: First, there is still a big gap between the RMB and the US dollar, especially when the RMB is less than

2% of international trade currency settlements, while the U.S. dollar accounts for more than 40%. The RMB's proportion is not only lower than the U.S. dollar, but also lower than the euro, pound and yen, ranking fifth in the world.

Second, in the global foreign exchange reserves, the RMB only accounts for about 2%, while the US dollar is in a dominant position, accounting for more than 60%. Similarly, the RMB only ranks fifth, lower than the euro, Japanese yen and

GBP.

Therefore, there is still a long way to go and it will take a long time for the RMB to replace the US dollar as an international currency.

Third, there is still a big gap in comprehensive strength.

Although my country's total economic GDP has reached 70% of that of the United States, and it has also made great progress in military, political, science and technology, education, culture and talents, there is still a certain gap compared with the United States, the only superpower today.

Even if our economic aggregate exceeds that of the United States in a few years, our comprehensive national strength may not be able to surpass the United States all of a sudden. We need to continue to work hard.

In the near future, our country is very likely to become the first country in the world to launch a digital currency. This will give the RMB an advantage in the currency market when it is digitized, and will be of great significance to our country in expanding the influence of the RMB in the world.

However, it may take some time for the RMB to completely replace the US dollar as an international currency.

Because now, whether it is an international settlement currency or a reserve currency, the RMB does not account for a high proportion.

At the same time, China must strive to be number one in the world in comprehensive national strength, including military, economic, cultural, education, human resources and other fields.

We firmly believe that it is only a matter of time before the RMB surpasses the U.S. dollar and becomes the world's currency, and the international influence of the RMB will gradually catch up with the U.S. dollar.