Top Things You Need to Know About the Digital Yuan
- The main objective had been to test the currency’s reliability, stability, ease of use, and regulatory concerns.
China began studying the potential of digital currencies all the way back in 2014, under the leadership of Governor Zhou Xiaochuan, and in April 2020, a national digital currency was tested in several large cities like Shenzhen, Suzhou, Chengdu, and Xiong’an.
The main objective had been to test the currency’s reliability, stability, ease of use, and regulatory concerns, at a time when decentralized currencies like Bitcoin were gaining traction.
China was one of the leading countries in terms of crypto mining and usage of crypto Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl , but now that a Digital Yuan has already been launched, traditional Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw are facing harsh treatment from the government.
Increasing competition in the payment space
Local tech giants like Alipay and WeChat Pay dominate the digital payment sector in China and the digital Yuan comes as a real contender, increasing competition in the industry, while also reducing system risks.
Linghao Bao, analyst at Trivium China, highlighted that “the system is owned by private companies” and if either of the two large brands were to go bankrupt, it could create systematic risks.
Chinese consumers already receiving Digital Yuans
In terms of the distribution system, the Chinese government assembled a two-tier system, which means the PBoC (People’s Bank of China) will distribute digital Yuans to commercial banks.
These entities will later be in charge of allowing customers to exchange their coins and cash for digital Yuans.
Also, based on media reports, millions of dollars’ worth of digital currency have already been deployed via a series of lotteries in multiple cities.
Using the new currency is not an issue, given people only need to download storage wallets and generate a QR code that can be easily scanned by payment terminals.
It does not resemble Bitcoin and other altcoins
As compared to Bitcoin and most of the traditional cryptocurrencies, the digital Yuan is a centralized payment solution and can’t be exchanged on popular platforms like Coinjump. In fact, China has been cracking down on exchanges since 2017, but that does not apply to the entire world.
Coinjump is located in Estonia, one of the countries currently with a regulatory framework in place, requiring all exchanges to get an operating license.
Users of Coinjump’s interface can buy or sell Bitcoin, while also taking advantage of the exclusive buy back service currently in place at Coinjump.
Despite being increasingly used locally, the digital Yuan is not a global cryptocurrency and comes with several important drawbacks, including control of the government.
Digital assets enthusiasts are against government-backed cryptocurrencies, given these negate privacy and freedom, two of the features enabled by traditional tokens such as Bitcoin.
The whole point of bringing digital money into existence was putting an end to the centralized monetary system dominated by central banks and instead providing a decentralized solution.
Communist regimes are expected to keep the pressure on Bitcoin, Ether, and other cryptocurrencies, while the only hope comes from Western Countries, where these assets can be integrated as investing tools or as alternative mediums of exchange.
China began studying the potential of digital currencies all the way back in 2014, under the leadership of Governor Zhou Xiaochuan, and in April 2020, a national digital currency was tested in several large cities like Shenzhen, Suzhou, Chengdu, and Xiong’an.
The main objective had been to test the currency’s reliability, stability, ease of use, and regulatory concerns, at a time when decentralized currencies like Bitcoin were gaining traction.
China was one of the leading countries in terms of crypto mining and usage of crypto Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl , but now that a Digital Yuan has already been launched, traditional Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw are facing harsh treatment from the government.
Increasing competition in the payment space
Local tech giants like Alipay and WeChat Pay dominate the digital payment sector in China and the digital Yuan comes as a real contender, increasing competition in the industry, while also reducing system risks.
Linghao Bao, analyst at Trivium China, highlighted that “the system is owned by private companies” and if either of the two large brands were to go bankrupt, it could create systematic risks.
Chinese consumers already receiving Digital Yuans
In terms of the distribution system, the Chinese government assembled a two-tier system, which means the PBoC (People’s Bank of China) will distribute digital Yuans to commercial banks.
These entities will later be in charge of allowing customers to exchange their coins and cash for digital Yuans.
Also, based on media reports, millions of dollars’ worth of digital currency have already been deployed via a series of lotteries in multiple cities.
Using the new currency is not an issue, given people only need to download storage wallets and generate a QR code that can be easily scanned by payment terminals.
It does not resemble Bitcoin and other altcoins
As compared to Bitcoin and most of the traditional cryptocurrencies, the digital Yuan is a centralized payment solution and can’t be exchanged on popular platforms like Coinjump. In fact, China has been cracking down on exchanges since 2017, but that does not apply to the entire world.
Coinjump is located in Estonia, one of the countries currently with a regulatory framework in place, requiring all exchanges to get an operating license.
Users of Coinjump’s interface can buy or sell Bitcoin, while also taking advantage of the exclusive buy back service currently in place at Coinjump.
Despite being increasingly used locally, the digital Yuan is not a global cryptocurrency and comes with several important drawbacks, including control of the government.
Digital assets enthusiasts are against government-backed cryptocurrencies, given these negate privacy and freedom, two of the features enabled by traditional tokens such as Bitcoin.
The whole point of bringing digital money into existence was putting an end to the centralized monetary system dominated by central banks and instead providing a decentralized solution.
Communist regimes are expected to keep the pressure on Bitcoin, Ether, and other cryptocurrencies, while the only hope comes from Western Countries, where these assets can be integrated as investing tools or as alternative mediums of exchange.