China's digital currency aims to leave the rest of the world in the dust

[beijingwalker]

China's digital currency aims to leave the rest of the world in the dust

Dion Rabouin
October 14, 2020


China is already test-driving the future of finance while the rest of the world is stuck trying to get its learner's permit.

What's happening: Over the past two weeks Chinese authorities in cities like Shenzhen and Chengdu have given out the country's brand new digital renminbi currency and are urging even faster rollout of the token nationwide.

• The country's central bank has distributed the currency to "lottery" winners who are reportedly spending it at thousands of retailers, including local supermarkets and pharmacies and even Walmart.

What they're saying: "We must serve dual circulation with fintech-led innovations," Chen Yulu, deputy governor of the People’s Bank of China, said in an article published on Sunday in the PBOC-run China Finance magazine.

• "We must build an independent and high-quality financial infrastructure … quicken the pace of research and development of the central bank digital currency, and ensure that pilot tests show [the digital currency] is controllable and safeguards the security of payments."

On the other side: The Bank for International Settlements and seven mostly Western central banks including the Fed, European Central Bank, Bank of Japan and the Bank of England published a report last week detailing the "foundational principles" and "core features" of a potential central bank digital currency (CBDC) in order to "guide exploration and support public policy objectives."

• None of the central banks committed to pursuing or producing a digital currency as part of the report.

Why it matters: The coronavirus pandemic has accelerated the world's move away from paper money and producing the world's first CBDC could put China in the driver's seat to steer the future of payments and currency.

Between the lines: "If you take the last 250 days what has happened is we’ve gone into a different pace of digital," Charlotte Hogg, CEO of European operations at Visa, said during a panel at the Institute of International Finance's annual meeting Tuesday.

• "Everything that we can see is that people who never used digital payments before are using them. They’re going to continue to use them, particularly as those more vulnerable in our societies continue to shield and it’s going to be ever more important for our recovery for all of our business communities to be able to use forms of digital payment."

Zoom in: Facebook attempted to produce a digital currency that would have been convertible across borders and provided users the opportunity to spend and exchange it, but was rebuffed by U.S. and international regulators concerned about a for-profit company having so much influence on the supply of money.

• That concern is still a driving force behind central banks' efforts — that and a desire to ensure commercial banks aren't left out in the cold once digital payments make many of their services obsolete.

China's digital currency aims to leave the rest of the world in the dust

The coronavirus pandemic has accelerated the world's move away from paper money.

www.axios.com

 

[Beidou2020]

 

[Viet]

China's digital currency aims to leave the rest of the world in the dust
Dion Rabouin
October 14, 2020


China is already test-driving the future of finance while the rest of the world is stuck trying to get its learner's permit.

What's happening: Over the past two weeks Chinese authorities in cities like Shenzhen and Chengdu have given out the country's brand new digital renminbi currency and are urging even faster rollout of the token nationwide.

• The country's central bank has distributed the currency to "lottery" winners who are reportedly spending it at thousands of retailers, including local supermarkets and pharmacies and even Walmart.

What they're saying: "We must serve dual circulation with fintech-led innovations," Chen Yulu, deputy governor of the People’s Bank of China, said in an article published on Sunday in the PBOC-run China Finance magazine.

• "We must build an independent and high-quality financial infrastructure … quicken the pace of research and development of the central bank digital currency, and ensure that pilot tests show [the digital currency] is controllable and safeguards the security of payments."

On the other side: The Bank for International Settlements and seven mostly Western central banks including the Fed, European Central Bank, Bank of Japan and the Bank of England published a report last week detailing the "foundational principles" and "core features" of a potential central bank digital currency (CBDC) in order to "guide exploration and support public policy objectives."

• None of the central banks committed to pursuing or producing a digital currency as part of the report.

Why it matters: The coronavirus pandemic has accelerated the world's move away from paper money and producing the world's first CBDC could put China in the driver's seat to steer the future of payments and currency.

Between the lines: "If you take the last 250 days what has happened is we’ve gone into a different pace of digital," Charlotte Hogg, CEO of European operations at Visa, said during a panel at the Institute of International Finance's annual meeting Tuesday.

• "Everything that we can see is that people who never used digital payments before are using them. They’re going to continue to use them, particularly as those more vulnerable in our societies continue to shield and it’s going to be ever more important for our recovery for all of our business communities to be able to use forms of digital payment."

Zoom in: Facebook attempted to produce a digital currency that would have been convertible across borders and provided users the opportunity to spend and exchange it, but was rebuffed by U.S. and international regulators concerned about a for-profit company having so much influence on the supply of money.

• That concern is still a driving force behind central banks' efforts — that and a desire to ensure commercial banks aren't left out in the cold once digital payments make many of their services obsolete.

China's digital currency aims to leave the rest of the world in the dust

The coronavirus pandemic has accelerated the world's move away from paper money.

www.axios.com

Just another form of electronic money

 

[Ghost Hobbit]

'China about to leave the world in dust in Boasting about Digital Currency'

 

[jamahir]

Just another form of electronic money

That's correct. The cash and cheque method is just replaced by some electronic method. The base currency system remains the same capitalist foundation and does not ensure that a certain citizen does not get richer than another citizen.

 

[Viet]

That's correct. The cash and cheque method is just replaced by some electronic method. The base currency system remains the same capitalist foundation and does not ensure that a certain citizen does not get richer than another citizen.

Yes just money in another form. Paper money, electronic money, crypto money, issued by central banks, private banks, or anonymous banks.
Yes I hope one day when I wake up I see no more chinese propaganda.

 

[Beidou2020]

'China about to leave the world in dust in Boasting about Digital Currency'

Boasting? Nah that what you Indians do. Remember 2012 superpower? 2020 superpower?

 

[Beast]

Yes just money in another form. Paper money, electronic money, crypto money, issued by central banks, private banks, or anonymous banks.
Yes I hope one day when I wake up I see no more chinese propaganda.

The author is not even Chinese and same as the website and article. So what Chinese propaganda? If other smart people see and realise how good China is and want to boast for us, can we stop it?

 

[Zsari]

That's correct. The cash and cheque method is just replaced by some electronic method. The base currency system remains the same capitalist foundation and does not ensure that a certain citizen does not get richer than another citizen.

With a single national electronic system, where you bank is no longer relevant. It also locks out foreign banks from your financial market unless they join the system, which in term can act to replace the Swift clearing system for fund transfer between banks. There are alot more possibilities with it, not just at the consumer end.

 

[jamahir]

With a single national electronic system, where you bank is no longer relevant.

How many Chinese banks are there in China ? Because in a semi-communist country there should have been a single nationalized bank that had two purposes only : keeping people's savings account and lending interest-less loans.

 

[Zsari]

How many Chinese banks are there in China ? Because in a communist country there should have been a single nationalized bank that had two purposes only : keeping people's savings account and lending interest-less loans.

Is that your understanding of communist country? China has 9 state owned, 12 publicly held nation wide banks, and many more regional and rural banks. Bring all these together under a single system in itself is a major advantage. This is why China is opening up its financial sector, and this will also become a major vessel in RMB's internationalization.

 

[jamahir]

Is that your understanding of communist country?

Please remember that communism calls for the abolishing of the traditional money system.

China has 9 state owned, 12 publicly held nation wide banks, and many more regional and rural banks. Bring all these together under a single system in itself is a major advantage.

What you say is good i.e. making all of them use a single method of money transaction but all of them should be brought under the same name and leadership.

The second step would be combining the Chinese Reminbi currency and the being-implemented "Social Credits" system to bring to effect a new communist economic system like one proposed by myself in this thread.

 

[beijingwalker]

Residents in Shenzhen experience China's digital currency

 

[Ghost Hobbit]

Boasting? Nah that what you Indians do. Remember 2012 superpower? 2020 superpower?

ANother way of boasting. Boaster.

 

[Mk-313]

doesnt your country have a dollar shortage? and it ended up causing 3x the defaults of chinese firm who had debt in USD and you ended up opening your bond market to fill the dollar liquidity..... and supposedly you left the world in dust????

China’s US dollar debt defaults climb as virus, US tensions hurt business

US dollar bond defaults by Chinese firms have jumped threefold to US$12 billion so far this year from US$4 billion for all of 2019, shaking market confidence.

www.scmp.com