Digital Yuan Seeks World Domination
China has already started testing the financial model of the future – the Digital Yuan. Let us recall that other countries of the world are tirelessly working in this direction. Over the past two weeks, in cities such as Chengdu and Shenzhen, Chinese authorities have launched a new digital yuan and called for faster token promotion across the country.
The People’s Bank of China (PBoC) has distributed the RMB digital currency through the lottery to numerous retailers such as local pharmacies, supermarkets and even Walmart.
Chen Yulu, Deputy Chairman of the People’s Bank of China, said:
As demand rises, we must provide services through financial technology innovation. We must build an independent high-quality financial infrastructure to accelerate the development of central banks’ digital currency. Make every effort to ensure the success of the pilot test. Which will be able to prove that digital currency can control and ensure the security of payments
On the other hand, the Bank for International Settlements and seven major western central banks such as the European Central Bank, the Federal Reserve, the Bank of England and the Bank of Japan released their report last week. The report details the key characteristics and fundamentals for CBDC digital currencies to guide research in supporting public policy goals .
The current health crisis has accelerated the world’s transition from paper money and the development of the world’s first CBDC could make China a leader. Which will shape the future of currency and payments around the world.
Visa Europe CEO Charlotte Hogg said:
Over the past 250 days, there have been dramatic changes and we have entered a different era, the digital age. We see people who have never used digital payments to start using them. And they will continue to use them. It will become increasingly important for all business communities, governments and financial institutions to be able to use digital payments for our recovery and prosperity.
Facebook tried to create a digital currency called Libra. This currency could be used on a cross-border scale and increase the ability of users to consume and exchange. However, the United States and other international regulatory bodies objected. The argument was that a commercial company could gain too much influence over the financial system and the money supply.
This concern continues to be the driving force behind most central banks. After digital payments have made most services obsolete, it is imperative to ensure that commercial banks are not left behind.
While other countries are thinking about the benefits and dangers of digital currency. China appears to have gone far ahead in the race to create a central bank digital currency.