China will fight back if digital dollars corner global savings

The rivalry for the money of choice in the 21st century is heating up. Now that the regulatory stalemate in the U.S. over whether exchanges should reward stablecoin users is nearing a resolution, China may promote its digital yuan in emerging markets that are most likely to get dollarized. Last year’s Genius Act, the law under which the private sector will offer 1:1 representations of the dollar, prohibits stablecoins from sharing with customers the income earned by their issuers on assets backing the tokens. But banks also wanted a total ban on third-party rewards to prevent a flight of deposits,…