Digital Yuan: A Story of Chinese Currency
The fundamental purpose of physical money is becoming digitally supplemental.
Way back in history, every region has its own acknowledged currency. Each of which has a certain power of acquiring goods and services. With the objective of uniting the country in a fiscal sense, the first emperor of ancient China became the first leader to declare the copper coins as the only currency accredited by the whole land.
Centuries have passed, the copper coin became the standard backing for each printed bill in China. These were the first printed bills in the world, tagging China as one of the pioneers that implemented a national currency.
Fast forward to 2021, China is now a country with the most visible results of what it envisions in the past. It even easily adapts to the digital environment. Today, the nation has the most advanced plan for the usage and distribution of the first-ever blockchain-adjacent centralized digital currency, the Digital Yuan.
The newest currency is also known as DCEP (digital currency electric payment). It is getting ready to gain its prominence globally. China will experience its most potent development if it can keep up the pace of launching and maintaining a stable digital economy. It’s the perfect moment to invest in this market that has great potential of leading the global market. Time is of the essence when it comes to investments. Do not stay in the tail of progress. The earlier you take the risk, the better outcome you can experience.
Of course, they are not alone. Other countries have begun to do more research studies and development proposals to boost their present digital currency. Unfortunately, none has made it to the level as China did. But wait, there’s more! The Chinese government and People’s Bank of China themselves are actively backing the trade and continuous enhancement of the Digital Yuan. The destiny of China to be the first cashless country worldwide seems almost inevitable.
However, Alipay, WeChat Pay, and Tencent payment apps are widely used and accepted across the country and other continents. This technological movement rose to success because other nations lack credit card-based infrastructure. Since these apps can cater to the rest of the world, it seems that the Digital Yuan is pointless.
No! The concept is not worthless at all. Like any other apps, they have limitations. Businesses may or may not accept this mode of payment. Luckily, Chinese coins are supported by the government. Therefore, everyone is required to accept it. Also, Alipay, WeChat Pay, Tencent, and other apps badly need an internet connection for each transaction. Digital Yuan can be sent and received without the same. It seems like the coin is a tough contender against these payment giants. There is still a bit of time needed until China’s economy becomes fully digital will surely happen.
Up to this point, we know that small-scale pilots have been launched in 4 cities across China. Some giant vendors such as McDonald’s and Subway have agreed to use their businesses for the test phase. Once the trial proves to be successful in the pilot cities, the plan is to introduce the usage in Beijing and Hong Kong. The next big step is to use the digital Yuan at the 2022 Winter Olympics. All tourists who will come to watch the games will only need to download the digital wallet. Then, it can pay for goods and services and does not require a Chinese bank account.
At the end of the day, it will be up to the consumer how they want to pay for their goods. But with the right implementation and consistency, the Digital Yuan has the potential to become the world leader in cashless payments.