China's digital currency comes to WeChat. Next stop: over a billion users
- Reference: 1649390535
- News link: https://www.theregister.co.uk/2022/04/08/digital_yuan_wechat_integration/
- Source link:
WeChat boasts over 1.2 billion monthly active users, is ubiquitous in China, and is popular outside the Middle Kingdom too.
For now, only users in Chinese cities where the Digital Yuan is already being trialed can choose to pay with the currency. But that pool of cities is expanding steadily – this week the People's Bank of China announced eleven cities have been added to trials. The collective population of those cities exceeds 80 million – a total that would rank as the world's 20th-most populous nation.
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Making the Digital Yuan available to so many people is an obvious sign that China wants the digital currency to be widely used.
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Integrating it with WeChat is even more significant. Cash is passé in China, and payment with apps accounts for an overwhelming majority of transactions.
[4]Biden issues Executive Order to tame digital currencies
[5]Indian PM says digital rupee will facilitate creation of global digital payment scheme
[6]Giant Japanese corporations to launch bank-backed digital currency
[7]UK Treasury and Bank of England starting to sound serious about 'Britcoin'
Alibaba and Tencent dominate such payments, but Beijing is not entirely happy that the web giants have come to play such a central part in Chinese life. There's currently no sign that Beijing has designs on restricting their payment services, but adding the Digital Yuan as an option means that the People's Bank of China will gain a place in the tools most Chinese use for their everyday shopping.
The Bank will also gain a foothold overseas, because many people around the world use WeChat. The Chinese diaspora is sufficiently engaged with the app that it's used as an [8]election campaigning tool outside China.
If integration with WeChat one day sees the Digital Yuan used outside the Middle Kingdom, Beijing will be very pleased. It hopes the currency could rival the US Dollar's ubiquity in international trade.
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Central Bank digital currencies like the Digital Yuan are designed to replace cash and to offer the convenience of digital payments while preserving the anonymity inherent in exchanging coins or bills. However, US senators have [10]warned the Digital Yuan allows Beijing to surveil users – an allegation that, if true, makes the currency rather less appealing. ®
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[4] https://www.theregister.com/2022/03/09/biden_executive_order_cryptocurrency/
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[6] https://www.theregister.com/2021/11/25/dcjpy_japan_private_digital_currency/
[7] https://www.theregister.com/2021/11/10/uk_cbdc_consultation/
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[10] https://www.theregister.com/2021/07/22/tokyo_olympics_data_leak/
[11] https://whitepapers.theregister.com/
Meh?
After thinking about it for a while, I concluded that a digital currency needs either to keep track of all transactions or to somehow move itself from one user to another then wipe itself out on the first user's device. Not easy to do. Maybe there's another alternative. If so, I'd like to hear about it.
So we're left with ledgers recording transactions. Those can either be public, distributed (and probably encrypted) e.g cryptocurrency. The problems with cryptocurrencies are well know. It's really hard to envision them being usable for every purchase of a pack of cigarettes or bottle of cola for a human population of 7 billion plus. Or they can be managed by a trusted authority -- e.g. Mastercard, Visa, AliPay, WeChatPay, PayPal (Why on Earth would anyone trust PayPal?). e-CNY appears to be the latter with the People's Bank of China serving as the trusted authority.
I went searching for some meaningful information on e-CNY. I found next to nothing. The best I could find is this https://digichina.stanford.edu/work/lets-start-with-what-chinas-digital-currency-is-not/ which isn't very deep, but at least seems to have some actual content. It's points I think are:
1. China is taking digital currency (but not cryptocurrency which they have banned) seriously. It's in their long term plans.
2. It is still in its very early stages with a pilot project running in (as of March 2022) ten cities.
3. There is no current mechanism for internationalization of the e-CNY. And probably the only places you can spend any you somehow come by are in China.
Something else being conjured up for the FUD Continuity Show?
However, US senators have warned the Digital Yuan allows Beijing to surveil users – an allegation that, if true, makes the currency rather less appealing.
How very odd? That is not a warning to be heard from US senators whenever considering Bitcoin or others of a similar ilk. Indeed, in such cases, is the exact opposite of great concern to them because of their fear of its attraction in bypassing their own fiat dollar remote command and control levers.
What on Earth are they playing at? What’s their End Game? Anything attractive and universally appealing? Something right dodgy and designedly demeaning?
So many questions for hypocrites and liars . So few honest answers. Question more delivers much more for future solutions /proposals.