Trusted With Freedom
The last piece ended with a paradox. The structure that allows China to move quickly in launching a digital currency is the same structure that may keep it from reaching global reserve status.
A reserve currency is not only a symbol of economic strength. It reflects the world’s confidence in how a system handles uncertainty, disagreement, and change.
Speed Helps. Trust Decides.
The United States does not always move first. What it has earned, however, is the benefit of the doubt. Markets know that, even in the midst of political friction, rules will hold. Contracts will be enforced. Capital can move without fear of surprise interference.
That reliability is not accidental. It has been earned through legal consistency, independent institutions, and a broad commitment to pluralism. These are not the fastest paths to innovation. They are the foundations of trust.
China’s System Offers Control, Not Openness.
The Digital Yuan exists inside a framework of surveillance, data consolidation, and currency controls. The rollout has been smooth. Integration has been well-coordinated. Adoption, however, remains largely domestic. Remember from part one they are operating with a different set of rules.
Foreign governments and institutions hesitate. They understand that access is not the same as freedom. A reserve currency must remain usable under stress, across borders, and beyond political preference. Trust built on control is brittle. Not to mention and maybe we explore this later: holding a currency is very different than trading in one. Trust has to be present and abundant in both instances.
This Is Why the Dollar Still Anchors Portfolios.
U.S. assets remain a core holding for institutions around the world. They are imperfect, yet have proven resilient. Investors look for more than yield. They look for continuity. They ask whether today’s value will still exist tomorrow, even if leadership shifts or laws evolve.
Digital currencies will shape the future. Their form may change. Their reach may expand. Their value, however, will still depend on what lies beneath.
In China, digital currency reflects the values of efficiency and coordination. In the United States, the hesitation reflects a different value. Freedom. That hesitation may frustrate those eager for innovation. It may even delay technical progress.
But in the long run, freedom is what makes the system worth trusting. And trust is what the world still buys.
Lauren Pearson
The most important thing in my life is my family. My husband, Andrew, and our three smart and brave daughters.