Volume 3,Issue 8
Conditional Acceptance: The Digital Yuan, Dollar Hegemony, and the Digital Colonial Dilemma of the Global South
This paper examines the geopolitical and economic implications of Central Bank Digital Currencies (CBDCs), focusing on China’s digital yuan (e-CNY) and its potential impact on the Global South. As digital currencies challenge traditional financial systems, the paper explores how emerging economies, particularly in Africa, Asia, and Latin America, navigate the tension between integrating into new digital financial ecosystems and safeguarding monetary sovereignty. While the U.S. dollar’s dominance in global finance remains entrenched, the rise of CBDCs—especially China’s e-CNY—presents both opportunities and risks for peripheral states. The paper introduces the concept of conditional acceptance, arguing that e-CNY diffusion will depend on the bundling of digital infrastructure with trade/credit arrangements and the ability of adopting states to maintain autonomy through governance safeguards, such as data privacy, interoperability, and exit options. By bridging the gap between digital colonialism and agency, the paper outlines the conditions under which the Global South may adopt e-CNY, offering a framework for understanding the evolving dynamics of digital currencies in a multipolar global financial system. This analysis contributes to the literature on international monetary relations, digital currencies, and the geopolitics of financial sovereignty.
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