Talking digital yuan with “Global Business” host Robyn Dwyer on CGTN Europe.
I am always honored when CGTN Europe calls for commentary on the digital yuan! Thank you to the entire CGTN Europe team Natalia Scott, Juliet Errington Mann and Jamie Owen!
Today’s interview was an update on e-CNY that followed their FTX crypto coverage.
🔹China’s Alipay, Wechat Pay and the digital yuan:
WeChat and Alipay are already very strong in China, and now we are going to have a third with the digital yuan This is fundamentally good for Chinese consumers and all of them will coexist. The digital yuan will not eliminate WeChat Pay or Alipay, all of them have slightly different uses or niches. You will pick the money you want to use based on its functionality, on what you want the money to do.
🔹What’s the goal why has China introduced the e-CNY?
China is introducing the digital yuan as part of a societal digitization program. China is already “cashless” through WeChat Pay and Alipay which have already brought tremendous benefits to GDP and commerce in China. Now China is taking the next step, taking it further, to bring more digitization to society with the digital yuan that can be programmed and used as the national currency.
🔹What are the infrastructure challenges with launching the digital yuan?
What you are seeing right now is that the digital yuan is in trial phase and the Peoples’ Bank of China is “meticulously” rolling out the e-CNY in city after city. They are responsible for making sure that it works, the first time and every time you go to use it.
The infrastructure is mostly there because people in China already pay with QR codes with WeChat and Alipay, that same QR code is how you’ll pay with e-CNY. It’s the software that connects everything behind the scenes that the PBOC is working on. This is a long and very careful process.
🔹China moving toward cashless will other countries embrace the technology?
Absolutely! Right now some 90% of the central banks in the world are looking at CBDC. They are looking at the idea that cash someday will leave paper format and go completely digital. Now the interesting thing is that the most advanced countries investigating CBDC are all in Asia. We are looking at a future where Asia and China are going to lead the West with CBDC. As I like to say China has a “first mover” advantage.
🔹Bonus question on Yuan use that wasn’t asked, from my notes:
-This year the IMF increased the yuans weight in SDR basket by 12% showing great progress.
🔥The most exciting advance, however, comes from trade data. A full 30% of trade with China now settled in RMB compared to 20% two years ago. A 50% increase over two years shows how the yuan is making great gains!🔥