Talking China’s digital yuan with Rui Ma on Tech Buzz China!
This Live Cast was a real blast because Rui is a China expert and her questions were spot on! If you don’t listen to Tech Buzz you should.
Listen to Rui’s observation and question at 16:45 it’s just PERFECT! My answer also shows why CBDC is so critical!
Note that there is an Apple Podcast version of this discussion here: https://apple.co/3BiMwXm
Some sound bites:
3:00 Digital RMB in one sentence: The digital RMB is the digitization of cash. It takes paper money and turns it into a digital currency or digital product. It is not a crypto. OK, that’s 2 sentences.
4:00 Digital yuan tech: “China’s CBDC is based on a system that is inspired by crypto but doesn’t use blockchain tech.”
5:30 Privacy: “China’s CBDC has tiered levels of anonymity. Small purchases on the street are anonymous, larger purchases have KYC and AML.
8:25 Will other CBDCs have privacy systems like China? “Yes, we will see others use the two server-type systems that China does. One with the names, one with the pseudo-anonymous transactions. The question is whether the banks or the state holds the names.”
10:25 Will e-CNY break the duopoly of Alipay and WeChat? “It is commonly reported that the e-CNY is a vendetta against them. It’s easy to refute this. The PBOC launched its research on CBDC in 2014 the same year WeChat Pay and Alipay launched. They’ve been planning this for years!”
12:50 Impact to WeChat and Alipay: “Yes there will be an impact and will lose fees. But it will not remove their societal relevance.”
13:25 Payment with e-CNY is free: “Yes! That is what WeChat and Alipay brought to China and e-CNY will continue.”
14:10 e-CNY is a cash equivalent: “Absolutely! There is a real cost to the PBOC and society to run a cash network…that will slowly go away. We’re going to a future where machines and AI are going to pay, they need CBDC”
16:45 Listen to Rui’s fantastic observation: “China has one goal, to grow the real economy. You just can’t make that much money in China’s fintech. China is based on low cost while the West has lots of unicorns because of the high costs:” Rui gets China!
My answer: “It allows digital payment to be built into society at a deeper level than credit cards in the West today! Payment is more deeply integrated into society!“
20:00 e-CNY in the world: “The e-CNY is not an immediate threat to dollar dominance, but be afraid, be very afraid long-term. You need to think over a 10-year horizon. The e-CNY will become a regional reserve digital currency.”
22:00 Have I used it yet? Not then, but I have now and it’s as easy as Alipay.
23:00 Is it true it doesn’t need internet? “Yes this was a key design parameter!”
Full Transcript here: Livecast #14: Richard Turrin on China’s Digital Yuan
Listen in podcast format: