“e-breakout”? Weaponised Interdependence and the Strategic Dimensions of China’s Digital Currency

Abstract

Abstract The government of China has touted the development of a digital version of its currency as a watershed moment in its ongoing financial modernisation processes. The experimental digital renminbi or eCNY is expected to be fully implemented in the next few years, and thus far its initial benefits have been seen primarily on the domestic level. Yet Beijing is also open to the eventual use of the eCNY for international transactions, which in light of the many governments seeking to develop their own central bank digital currencies raises the question of whether or not this e-currency could develop into a global standard. The concept of “weaponised interdependence”, meaning the ability of states to gain bargaining advantages from global networks through the collection of data and to deny others access and benefits, is an ideal method of gauging the potential of the digital renminbi for enhancing Beijing’s power in global financial markets.