• Sonja Krauss
This research investigates the reasons and motivations behind the active efforts of China to
develop the status of the RMB, specifically through RMB internationalization and the
development of the e-CNY. The research is structured around seven sub-questions that
analyze the drivers, current state, US response, potential benefits and risks, and potential
impact of the RMB internationalization strategy and the usage of digital currencies on the
global financial system and the dominance of the USD as the global reserve currency. The
hypothesis suggests that the RMB internationalization strategy of China revolves around the
goal to reduce dependency on the USD while enhancing the economic and geopolitical
influence of China. Additionally, that the digital nature of the e-CNY presents advantages
that can be leveraged over traditional currencies such as the USD to achieve its goal. The
research is based on a theoretical framework comprised out of International Political
Economy (IPE), Structural Realism, and Rise and Fall theory; a qualitative (deductive content
analysis) and quantitative (descriptive quantitative analysis) mixed methods approach. The
findings of the research suggest that there has been an upwards trend in the efforts of China
to internationalize the RMB despite recent financial and geopolitical influences. In addition
to that, that the e-CNY could be a viable alternative to traditional currencies. Therefore, it
enhances the RMB internationalization strategy and poses a potential challenge to the
dominance of the USD over the current international monetary system (IMS).
SpecialisationChinese Area Studies
Publication date12 May 2023
Number of pages69
ID: 528120976