After several years of consideration, China is close to implementing a digital version of the Yuan backed by blockchain technology. To trade in bitcoin with the help of advanced AI technology; the platform is suitable for even novice traders. In the meantime, other countries like Norway, Denmark and Canada are also studying e-CNY. For Chinese consumers, a digital currency is not only convenient when making payments. It also opens new business possibilities for merchants to offer innovative payment solutions based on e-CNY. If you are interested in Digital Yuan, you may consider the recommended platform like Desire Crypto and how it will work.
The increased use of e-CNY has the potential to cut costs and increase efficiency in the retail sector through lower transaction fees and faster transaction times. Likewise, it will bring revolutionary changes to other sectors, such as the finance industry. Banks can adopt blockchain technology to reduce risk, improve efficiency and meet regulatory requirements.
In the digital age, when a cashless society is just a step away, there are concerns about protecting consumers’ privacy and preventing data breaches. Banks have used ACH for domestic payments in the US for decades as an alternative to cash and checks. It could take a few years before the general public will widely adopt CBDCs, but China, Norway, Denmark, Canada and other countries are already moving in that direction. Let us discuss the use of digital Yuan.
Digital Yuan as a payment method:
Thanks to the digital age, money has never been more convenient. However, for Chinese consumers, a digital currency is not just an alternative and a form of payment. It can also open new business opportunities for merchants to offer innovative payment solutions based on e-CNY.
The increased use of e-CNY has the potential to cut costs and increase efficiency in the retail sector through lower transaction fees and faster transaction times. Likewise, it will bring revolutionary changes to other sectors, such as the finance industry. Banks can adopt blockchain technology to reduce risk, improve efficiency and meet regulatory requirements. Let’s have a look at the daily use of digital Yuan.
Buying Groceries:
Nationwide use of digital Yuan will also benefit consumers by giving them more shopping options.
- A superior alternative to cash on hand at the point of sale.
- Lower transaction fee in comparison to cash or card.
- Faster payment for online purchases.
- Increasing the buying power of the yuan one dollar can buy.
- Better protection for consumer privacy.
- The ability to pay anytime, anywhere and any place where people can reach a bank.
- The improvement in customer experience.
Digital Yuan as an investment tool:
In 2016, the PBOC launched a digital currency research project and planned to build its digital currency based on blockchain technology. Since 2017, the central bank has conducted several tests intending to issue a new type of digital money (CBDC) shortly and recently rolled out the entire pilot project of digital Yuan in 2021. In addition, it aims to improve its financial infrastructure, enhance supply-side structural reform of the real economy and promote RMB internationalization.
The PBOC has confirmed that commercial banks will issue the digital Yuan, but it remains to be seen how the new currency will fit into the monetary system and whether private firms will have access to it in the future.
Large sums of Yuan are often held in overseas exchanges, especially in bitcoin markets. To prevent capital outflow, China has been cracking down on overseas cryptocurrency exchanges and ICOs. As a result, offshore exchanges and ICOs have become new ways for Chinese citizens to bypass capital control measures and invest in Bitcoin or other cryptocurrencies. If creating digital Yuan is part of a plan to regulate offshore investments, this would likely address this issue.
Digital Yuan for daily life transactions:
In 2016, the total amount of credit card payments accounted for about 2 billion yuan, an increase of 61% over last year. Credit and debit card payments account for only 40% of the total consumer market, but they will be higher than 50% in the future. The trend shows that cashless payment has become a trend and is increasing in China. Digital Yuan will be used for daily transactions because digital money is more convenient, safe and flexible than paper money.
Digital Yuan as a settlement tool:
The PBOC is also improving its service systems to support transactions in digital currency. For example, in 2017, the central bank launched an application called Renmao that allows consumers to transfer funds by scanning a phone. In addition, the PBOC recently tested a new “Dong Zheng” feature, which can be processed within seconds.
As a result, transactions using Dong Zheng accounted for 3.2 billion transactions in the first half of 2018, up more than 30% year on year. These digital payment systems are expected to be applied to the digital Yuan.
The possibility and demands for electronic money have been widely discussed, and there is a lot of interest in how this could impact an industry as diverse as finance. However, the PBOC has already clarified that the digital Yuan would not be a decentralized, anonymous cryptocurrency that people in cross-border transactions can use.
