China’s digital yuan could help countries like North Korea evade US sanctions, experts say

A digital yuan could allow some countries to avoid U.S. sanctions and increase the Chinese government’s influence, experts told CNBC. The People’s Bank of China is working on a digital yuan but has released very few details about the technology behind it or the timeline of its release.

But experts are concerned about the potential power this could give the Chinese government. Neha Narula, director of the Digital Currency Initiative at the Massachusetts Institute of Technology (MIT), described a simulation that took part in November involving a number of people including Larry Summers and former U.S. Secretary of Defense Ash Carter. It was organized by Harvard Kennedy School’s Belfer Center. Narula was part of the simulation.

The participants simulated a White House National Security Council meeting in response to a major security crisis. One of the situations involved North Korea developing a missile that had the capability to reach the U.S. It was funded by the digital yuan which allowed North Korea to bypass the global banking system and U.S. sanctions.