Per the People's Bank of China (PBOC), banks in China handled non-cash mobile payments of $49.27 trillion in 2019, more than 25 percent from the previous year. So, why is China pushing for a digital currency, and how is it different from other electronic payment options?Ī regular consumer transaction with a digital currency would be pretty similar to an online payment transaction with Alipay or WeChat Pay. Using those electronic payment tools, one has to have a bank account with money in it, from which funds are deducted when they pay through apps. Users are not out of the traditional banking system. However, with digital currency, one does not need to have paper banknotes in a bank account somewhere. The digital currency is deposited directly into your electronic bank wallet.ĭigital currency is digitally created. It is still cash, but another type of cash. Imagine yourself living in a virtual world or a video game digital currency is just like the coins you earn and spend in the game. It has real monetary value you just can't touch it.Ĭhina's digital currency is issued by the central bank, which makes it totally different from cryptocurrencies like bitcoin and Facebook Inc's Libra. Since all currencies issued by the central bank are debt, the nation will use its power to guarantee the digital currency's repayment for credibility.Īccording to the PBOC, the digital currency currently being tested shares features with cryptocurrencies, like bitcoin and Facebook Inc's Libra, but it will be designed to handle transactions more quickly, making it feasible for wider adoption in China. Professor Jeffrey Towson, the host of Jeff's Asia Tech Class, once commented on CGTN's Dialogue that using a central bank-backed digital currency is a bit more efficient for consumers since it doesn't require the intermediate step to link their bank accounts with online payment systems. He also said it's more significant on the government's side because it allows the government to have more visibility in real-time transactions and bypass the Western banking system when making transactions outside of China.China has launched its own digital payment method, the Central Bank Digital Currency (数字人民币 in Chinese) and is rolling it out in shops around the country. Different from WeChat Pay and Alipay that are run by private corporations, the digital yuan is issued by the Chinese government through the People’s Bank of China. You don’t need to be a China expert to know that a digital currency run by the government will roll out fast, and most likely take over the dominant position currently held by Tencent and Alibaba's payment systems.Īnd the good news: Foreigners can already use it, with just a few limitations. In our first tests, absolutely no name verification was required.Īnd for any foreigner who's ever struggled with things like real name verification on WeChat and Alipay, there is good news. Amen! In fact, we set up the app without providing a real name, just a phone number, and it worked fine. There doesn't seem to be an official English name for it. The English Wikipedia calls it " Digital renminbi" the Chinese Wikipedia calls it " E-CNY". The actual app is all in Chinese, but at some point, it uses the term "E-CNY" so let's go with that. Here's How You Set It Up.Ĭurrently you can't find the app on the app stores directly but have to redeem a special code that you use to get access in APP stores, presumably to limit the numbers of people that start using the currency in the early stages.
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