WHY THIS MATTERS IN BRIEF
If tokens become a recognised settlement unit, China could build an AI-era currency that erodes the US dollar.
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Over the past few years we’ve seen a near exponential increase in the number of companies using AI Tokens and now it looks like China might be thinking two steps ahead to use them to cement the country’s global dominance – in the AI, digital and economic fields. This week China officially designated “ciyuan” as the translation for “token” – the computational units that power tools such as Claude, ChatGPT and Gemini – in a move widely seen as devising a new form of global currency, perhaps to challenge the US Dollar, for the age of Artificial Intelligence (AI).
In Chinese, ci translates to “word”, while yuan is commonly used as a synonym for “currency”. For instance, the basic unit of the Chinese renminbi is the yuan, and most foreign currencies are referred to as yuan in Chinese, prefixed by their respective country names.
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While the US dollar has long been the bedrock of the global financial system, – where the key metrics are output per watt and cost per million tokens.
One such advantage stems from electricity, the essential raw material required to produce tokens and cryptocurrencies like Bitcoin which, as odd as it might sound, in the past Elon Musk has called an “Energy Currency.” China is the world’s largest electricity producer, and its power capacity has expanded at a rate that has repeatedly surpassed official targets.
On Monday, at the , Liu Liehong, administrator of the National Data Administration of China, used the term ciyuan as the official Chinese translation for “token” during a speech on AI development, effectively resolving a debate within China over how the term should be rendered.
In his address, Liu said the token, or ciyuan, was not only a value anchor for the intelligent era but also a “settlement unit” linking technological supply with commercial demand, thereby allowing business models to be quantified.
“A new value system is rapidly taking shape around the invocation, distribution and settlement of tokens, and this is becoming a major pathway for monetising the AI industry,” he said.
While “token” originally belonged to the technology lexicon, its new official name carries strong economic overtones – particularly at a time when Nvidia boss Jensen Huang is also seriously contemplating its potential use as a form of compensation.
How could AI tokens become a currency?
By treating compute tokens as a settlement unit priced in cost-per-token and output-per-watt, China could anchor economic value to AI capacity rather than to the dollar, leveraging its huge, cheap electricity supply.
