Centralised currency, centralised power
That CBDCs are controlled centrally evokes the stark policy differences between the US and China, with Chashchin quashing hopes as to whether Western nations can learn from China, and vice versa. This is because each has different financial systems, built up over decades, meaning they’ll have to approach CBDCs differently based on their legal frameworks.
The digital yuan is part of the reorientation of the Chinese payment system away from private tech firms and back towards a combination of government and banks, says Aaron Klein, senior fellow at the Brookings Institution.
This means it doesn’t hope to export Chinese-based digital wallets like Alipay and WeChat Pay in the hopes of becoming as ubiquitous as the Visa, MasterCard and American Express networks are.
Beijing digital currency push at winter olympics puts visa in a bind
Hector Retamal/AFP via Getty Images)
Even so, such overseas payments are still processed domestically in China, independent economist Gong Shengli told the Chinese-language Epoch Times on Feb. 15.
“It does not equal the internationalization of the RMB, which has no international payment capacity,” he said, given that China’s yuan currency is not yet fully convertible, or not being able to move freely in and out of China. “Whether in the United States, Europe, or elsewhere, it’s just the internal circulation of RMB.”
However, observers still spotlight its potential to subvert the dominance of the U.S. dollar in the long run, especially when it allows countries sanctioned by the United States, such as Iran, North Korea, and Afghanistan, to conduct more business with China.
Yi Gang, the governor of the central bank, said on Feb.
The Yomiuri Shimbun
She had just bought Olympic goods with digital yuan at an official shop in the Main Media Center in Beijing.
To pay via the official app, users need to select a bank that supports the e-CNY service, then register their mobile phone number and password, before charging the digital yuan in advance. Payment is completed with a scan of their QR code at the register.
The physical e-CNY card has been recommended for foreign visitors in China for a short time who do not have ID issued by China nor bank accounts in the country. Users of the card scan their passport at a designated automatic exchange machine and insert foreign currency to receive the card charged in e-CNY.
Then they just tap the card to pay.
In October 2020, China’s central bank, the People’s Bank of China, started a pilot program involving the public.
Digital currency push winter olympics visair
Instead, there’s a desire to reorient the internal Chinese system to be focused on a central bank digital currency run through digital wallets more directly tied to the Chinese banking system, explains Klein.
“I think the digital yuan will be integrated into the AliPay and WeChat payment systems so consumers and businesses still settle on those tech rails, but settle with government money,” he predicts.
He doesn’t think, though, that China’s experience has much at all in common with the US. Klein believes the US has had a very long history of running on a form of ‘CBDC’, the difference being the first ‘C’ stands for commercial instead of central. Commercial bank digital currency is what is used with debit and credit cards, he says.
Digital currency push winter olympics visame
He underlines one of the fundamental characteristics of cryptocurrencies is their decentralisation; with transactions recorded and anonymous on the blockchain, they operate outside the control of a central authority.
“It’s reasonable to take the view that any government-backed coin nullifies this premise and may even centralise cryptocurrencies,” says Chashchin. Unlike cryptocurrencies, like Bitcoin, the digital yuan isn’t blockchain-based, although it does allow transactions to be verified without the need for banks. With the digital yuan still in its infancy, though, Chashchin thinks it’s possible China might reconsider this stance and switch to blockchain in the future.
The expansion of interest around CBDCs coincides with a wider clampdown on blockchain-based cryptocurrencies.
Digital currency push winter olympics visan
“Replacing cash with digital yuan for payment can effectively reduce direct contact between people and the risk of the spread of COVID-19.”
Although in China, dominant mobile payment platforms, Alipay and WeChat Pay, have become widely accepted payment methods by the public.
Relevant personnel indicated that the digital yuan or DCEP may be catastrophic for dominant mobile payment platforms, the “stickiness” of those platforms and their wide-ranging lifestyle offerings as the reason they might endure despite the advantages of a government-backed digital currency.
But due to the exclusive agreement with visas at the Winter Olympics, the Olympic Village, athletes and tourists can only use cash, Visa cards or digital yuan for transactions.
The usage of the digital yuan raised scepticism to the U.S., Senator Pat Toomey, a senior member of the U.S.
BEIJING — At Beijing Winter Games venues, China’s digital currency has been designated as an official payment method.
China has been putting an emphasis on promoting the use of this digital yuan, or e-CNY.
To pay in the digital currency, the official smartphone app or a physical e-CNY card can be used.
China is trying to show off to the world that the country’s digital currency is in the stage of practical use, but private smartphone payment systems are already widespread within the country, making it difficult to expand use of e-CNY.
“It feels the same as using WeChat Pay or other such systems,” said a 21-year-old female university student Saturday who volunteered for the Beijing Olympics, referring to a popular smartphone payment system in China.
The e-CNY app is seen on a smartphone at the Main Media Center in Beijing on Saturday.
“However,” said Corr, “one of the main attractions for a privacy-minded public in supporting and purchasing cryptocurrency like Bitcoin, is that it is hard for governments to track.”
“And so the uptake of the e-CNY is unlikely outside of China’s borders unless it manages to become hegemonic and force people and countries globally to use its currency.”
That is exactly what the regime plans to do.
China will strengthen its cross-border yuan payments system and explore setting up infrastructure standards for a digital fiat currency as part of a five-year plan for financial standardization.
The plan, to be implemented during the 2021–2025 period, was published by four regime agencies including China’s central bank and the securities watchdog earlier this month, but was dated Nov.
Chinese people once relied on fully centralized currency in the form of grain‐ration coupons to buy rice, flour, cooking oil, and daily necessities amid the planned economy days under the Mao era. Such coupons issued from the 1950s—which strictly limited people’s choice of when, where, and what to purchase—were only abolished in the 1990s.
The QR payment code for Wechat Pay (R) beside a book about Chinese President Xi Jinping, titled “Xi Jinping; The Governance of China,” at a news stand in Beijing on Sept. 18, 2020. (Greg Baker/AFP via Getty Images)
“Once the digital currency is implemented,” said the researcher, who preferred to remain anonymous due to security concerns, “[it will] only upgrade the control by coupons to currency. And people will bear no privacy.”
In a letter sent to President Joe Biden in January, Sen.
Yet given the monopoly of the country’s third-party mobile payment providers—Alibaba’s Alipay and Tencent’s WeChat Pay—the PBOC is now pushing the boundaries of its digital yuan, or the e-CYN, to reach new clients.A worker at the front desk of Prince Ski Town Hotel checks a phone behind a sign saying “digital renminbi (e-CNY) is accepted” in Zhangjiakou, China, on Dec. 4, 2021. (Andrea Verdelli/Getty Images)
The country recently launched a trial-run “e-CNY” app ahead of the Beijing Winter Olympics, paving the way for an international debut of its central bank digital currency.
It is the first time that transactions over digital yuan have been available to non-Chinese users.
The goal is to replace physical banknotes and coins, which are, according to China analyst Anders Corr, “hard to surveil.”
“[Electronic payment] will make normal criminality, for example, drug and stolen good sales, more difficult,” Corr, principal at advisory firm Corr Analytics and author of “The Concentration of Power,” told The Epoch Times in an email.
“But it will also make any form of dissident activity, for example, the movement of refugees or the printing of dissident literature, harder to achieve, because there will be no cash economy, and therefore no cash to purchase related services,” Corr, also a contributor to The Epoch Times, added.
China unveiled the new electronic payment network in 2019 and began its trial in April 2020.