The international monetary and financial system and the digital revolution: perspectives for emerging and developing countries

ABSTRACT

This article investigates the impacts of the digital revolution on the international monetary and financial system (IMFS), emphasizing the effects generated by the new China’s digital currency, e-CNY. It is argued that from the point of view of emerging and developing countries (EDCs) the transformations of the digital age imply considering costs and benefits of implementing central bank digital currencies (CBDCs), in a context where this “new form” does not substantially change the hierarchical and asymmetric character of the SMFI. The e-CNY implies the establishment of new disjunctures, such as, for example, developing systems that are interoperable with the Chinese system, or not. This aspect carries a strong political component in the current context of questioning the status quo in various dimensions of the international system. To illustrate this aspect, the article brings empirical evidence on the evolution of the interconnections between the Chinese economy and the main EDCs in dimensions such as convergence in business cycles and financial cycles. Greater integration with China could work as a potential attraction factor for many EDCs, which could gravitate more towards e-CNY in a scenario of greater opposition to the US dollar dominance.

KEYWORDS:
International Monetary and Financial System; e-CNY; digital real; dollar