Interest in China’s digital yuan peaked at the Olympics with much of the world taking a detailed look for the first time. As you can see from the different geographies represented by these articles, curiosity about the digital yuan was genuinely global.
Let’s take a look at quotes I contributed to in leading publications. As you can see from the titles there were differing opinions on whether the digital yuan got a gold medal.
Titles link to articles
Some experts aren’t nearly as concerned about the privacy implications. Richard Turrin, author of the book Cashless: China’s Digital Currency Revolution, told Morning Brew: “CBDC is a digital product created by the state. And as such, it contains the morality, the desires, the ethics of the state that creates it.”
Turrin shows his digital wallet to the camera, which gives anonymity to users who spend less than 2,000 yuan (roughly $300) on a single transaction. There’s also a larger annual cap on anonymous spending.
“Most of their transactions are going to be below 2,000 RMB and they have nothing to fear at all,” Turrin said, referring to American Olympians competing in Beijing.
Turrin said: “My coffee shop doesn’t use it, my local supermarket doesn’t use it there. McDonald’s apparently uses it—where I never go.”
“The PBOC’s rollout of its new CBDC, the digital yuan or e-CNY is meticulous and extremely thorough,” Richard Turrin, the author of “Cashless: China’s Digital Currency Revolution,” said via email. “The trial is being conducted city by city with new features rolled out and tested in each.”
Turrin said, “It is important to think of this CBDC as a next step. Digital payments from Alipay and WeChat Pay are great but the new e-CNY is designed to go places and do things that neither of the payment platforms were designed for ― to bring the deeper integration of digital payment into China’s digital society.”
Turrin noted that while the digital yuan was not designed to be a “dollar killer,” the Chinese government has been unequivocal in stating its policy goal of decreasing dollar dependence, both internally and ― by implication ― externally.
“The e-CNY’s role will likely be to replace the dollar’s use in trade with China and in doing so, decrease China’s dependence on the dollar,” he said. “This will be a big achievement for the e-CNY and change the dynamics of trade, particularly within Asia.
“The PBOC has long planned its roll-out of the e-CNY for the Olympics,” says Rich Turrin, a Shanghai-based analyst and author of Cashless: China’s Digital Currency Revolution. “The PBOC understands that the eyes of the world are upon it, given that it is the first large, industrialized nation to roll out a CBDC. Because of this, it also understands that there is both no rush, and that it has to get it right the first time.”
“In order to get users on board with the digital yuan, the PBOC will have to provide a user experience that is equivalent to or better than that offered by the payment platforms Alipay and WeChat pay, which are ubiquitous in China,” says Turrin. “This is why the PBOC has always been clear that they want to work with the payment platforms, not against them.”
According to Turrin, “it’s not about the digital yuan replacing the dollar in global financial markets – that won’t really happen. What this does present is the potential to displace the dollar from regional trade transactions with China.”
According to Turrin, “Asia is the world leader in building CBDCs, and it is likely that the digital yuan will serve as a regional reserve digital currency.”
“Today’s China has become highly digital and cashless for the Chinese people, but there are no systems available to connect foreign credit cards,” Richard Turrin, a Shanghai-based consultant and author of Cashless: China’s Digital Currency Revolution, told Al Jazeera.
For the record, this was a misquote. I clearly stated that Alipay had these systems thought they were difficult to access
“At present, foreign visitors often find themselves unable to make payments in China, especially to small vendors and taxi drivers,” Turrin said.
On cross border usage: “This would need to be realised through slow political agreements made with central banks in different countries, mainly Belt and Road countries and RCEP countries,” said Turrin, the Shanghai-based consultant, referring to the world’s largest free-trade pact and the Belt and Road Initiative, Beijing’s cross-continental infrastructure drive. “This will be a very slow and limited rollout of its international use.”
If indeed China refrains from a full launch, it will not be much of a loss, said Richard Turrin, a Shanghai-based fintech consultant and author of “Cashless: China’s Digital Currency Revolution.” He told Forkast that China might as well take its time. “The plan was always to use the Olympics to showcase the digital yuan but not launch it in full,” he said. “The eyes of the world are on the PBOC and there is no need for them to rush.”