Yaya Fanusie fears “disaster” from US CBDC delays

China’s CBDC objectives are centered on domestic dominance, not competing with the U.S. dollar, according to previous analysts.

A cryptocurrency researcher and former CIA analyst fears the United States might lose control of the global financial system due to its comparatively sluggish start on Central Bank Digital Currency (CBDC) development.

In a February 28 interview with Bloomberg, Yaya Fanusie, the policy director of the crypto advocacy group Crypto Council for Innovation, highlighted that sanctioned governments are seeking to trade on financial infrastructure that isn’t owned or substantially influenced by the U.S.

Fanusie argues that if the United States continues to “sit on the sidelines” and fall behind on CBDC adoption, this might signal “trouble” and have unanticipated “geopolitical ramifications” over time:

Fanusie argued that state-issued CBDCs might be a component of this internationally adopted financial infrastructure, and that if the United States has little control over these new norms, this “impacts U.S. state economic statecraft.”

“The potency of our sanctions power comes from the centrality of the U.S. to the financial global infrastructure. So if that shifts a little bit, it doesn’t mean that China is going to take over or that the yuan is going to displace the dollar but if there’s a viable new rail where sanctioned actors can now transact, that’s trouble.”

The U.S. Federal Reserve, however, has lately made headway on the CBDC — the Digital Dollar Project — having published its most current whitepaper on January 18.

The Federal Reserve has not yet gotten authorisation from the United States government to proceed with the CBDC project.

China has researched CBDCs since 2014 and launched the pilot version of its digital yuan (e-CNY) on January 4, 2022, which Fanusie claims has already handled “millions of transactions” across “millions of wallets.”

Fanusie noted that there is a “assortment of pilots” testing smart contracts to add programmability to the CBDC and that China is assisting other nations in adopting comparable standards.

When states want to acquire a geopolitical advantage, there may be an implicit “race” occurring at the CBDC frontier, he noted:

“That’s happening whether we want to like it or not.”

Nevertheless, past observers on the CBDC rivalry between China and the U.S. have asserted that China’s CBDC ambitions are focused solely on internal supremacy, as opposed to competing with the U.S. dollar.

CBDCs operate on state-controlled ledgers, which are reportedly more efficient and user-friendly than decentralized public networks like as Bitcoin and Ethereum.

Yet, some opponents of CBDCs claim that states are implementing blockchain-powered CBDCs in order to keep financial control over their citizenry.

Tom Emmer, a pro-crypto U.S. congressman, has presented the CBDC Anti-Surveillance State Act to safeguard the financial privacy of U.S. residents against Federal Reserve operations.