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China's yuan is leading the digital currency movement — the U.S. is still on the fence

The U.S. dollar remains the world's de facto monetary reserve, but with China going full speed ahead with its digital yuan, the U.S. dollar faces a challenge: follow the trend, find a better alternative or risk losing its place in the world economy.
14:50
Sat, Jul 24 20219:00 AM EDT

The first known examples of paper money were created in China more than a thousand years ago. Now, China is disrupting money again by becoming the first major economy to create and distribute a digital currency. The world seems ready for it, as services like Venmo, Apple Pay and cryptocurrencies like bitcoin have prepared us for virtual transactions.

A Central Bank Digital Currency (CBDC), is entirely digital, like cryptocurrency, but is controlled by a government and/or central bank, like standard currency. China isn't alone in its ambition to digitize money. Nearly 80 countries around the world are researching or testing a digital currency of their own.

The U.S. dollar remains the world's de facto monetary reserve, but with so many countries like China going full speed ahead developing a CBDC for themselves, the U.S. dollar now faces big challenges. To stay ahead, the U.S. will need to follow the trend, find a better alternative, or risk losing its place in the world economy.

Watch CNBC's deep dive video into CBDCs to learn more.