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

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.