The digital yuan users are unimpressed with it after China released a weekly trial of it and users think it hasn’t offered anything different than other payment apps like Alipay. In today’s crypto news, we take a closer look at the launch.
After a week of utilizing $1.5 million worth of digital yuan sent to 50,000 Shenzhen citizens, those that used the funds to purchase something were not impressed. Analysts however claimed that the trials are a major step towards a real-life practical usage for China’s digital crypto. The Digital Yuan users were not impressed with but the central banks are still working on launching their own central bank digital currencies. A lot of reports in the past suggested that China leads the race but the end-results were theoretical.
It seemed that the landscape changed over the past week when the news broke about Shenzhen’s government giving away 10 million yuan or about $1.5 million worth of digital currency in a lottery to about 50,000 people. After downloading the designated app, the users were able to receive and spend the funds at about 3000 merchants in the region which was the first practical usage for digital currency.
Following about 7 days of trials, the results surfaced and most users’ conclusions were that the app operated similarly to the existing online payment application like Wechat Pay and Alipay. Having this in mind, the economist at PwC China G. Bin Zhao, said that the central bank and the government to invest heavily in education, application, and marketing of the digital yuan to become popularly accepted. He added that it is important to offer convenience and other benefits in order to make the digital yuan different from other applications.
Despite the pessimistic conclusions from the users, the applications in real life of China’s digital currency put an edge on other superpowers like the United States. The Digital yuan operates outside of the existing financial infrastructures like Swift so the report only highlighted the growing fears from the West that if the digital yuan reaches international usage, it could undermine the dominance of the US market. The digital yuan operates outside of the existing financial infrastructures like Swift so the West fears that if the digital yuan reaches mass international usage, it could undermine the USD dominance.
Chief China economist Raymond Yeung, said that the government will prioritize the digital coin usage as it will allow authorities to monitor currency circulation closely. He also introduced other merits like preventing money laundering.
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