![]() For city dwellers, the figure was 80 percent. By the end of 2021, about 64 percent of Chinese people were using mobile payment systems, according to a report by Daxue Consulting, with Alipay and WeChat Pay handling most payments. As smartphones took off, mobile payment systems rapidly drew in consumers who, unlike those in richer nations, didn't own credit cards, says Martin Chorzempa, whose book The Cashless Revolution charts the rise of digital payments in China.īy the mid-2010s, Chinese people in big cities had generally switched from using cash to using Alipay and WeChat Pay. “Chinese policymakers are trying to not just create a technical infrastructure, but an institutional environment that makes this kind of currency that has social control implications more acceptable in the long run,” she says.Ĭhina is well positioned to jump ahead of the West in digital currency in part because its banking system was until recently less developed than that of countries like the US. But Emily Jin, who researches the country's economy at the Center for a New American Security, says the project has political as well as economic motivations. President Xi Jinping regularly calls for China to take the lead in developing the digital economy. ![]() The European Central Bank is studying whether to roll out a digital euro, and US president Biden and some members of Congress have called for research into developing a digital version of the dollar.Ĭhina’s project is motivated in part by its leadership’s awareness of how the country has played catch-up in earlier technologies, from space exploration to the internet. Brazil planned to launch a digital real this year but has pushed back its rollout to 2024. The think tank’s Central Bank Digital Currency Tracker lists 105 countries exploring a central bank digital currency, but only 26 are in pilot programs or fully launched.Įarlier this month India’s central bank said it would begin rolling out a digital version of the rupee. “China is clearly the leader globally in terms of how far along they are, how many people are using it, and most importantly, the size of the country,” says Jeremy Mark, a senior fellow at the Atlantic Council. ![]() But on the back end, payments are not routed through a bank and can sometimes move without transaction fees, jumping from one e-wallet to another as easily as cash changes hands. The currency has the same value as its analog equivalent, the yuan or RMB, and for consumers the experience of using the digital yuan is not that different from any other mobile payment system or credit card. Unlike a cryptocurrency like Bitcoin, the digital yuan is issued directly by China’s central bank and does not depend on a blockchain. ![]() Those numbers are modest compared to the size of China’s population and economy, but they are expected to grow after a recent expansion of digital yuan trials in China from about two dozen cities to four entire provinces. The People’s Bank of China reported that its official eCNY app had 261 million users at the end of 2021, and that by August 31 more than 100 billion yuan (about $14 billion) had changed hands across 360 million transactions. At the same time, China’s world-beating digital yuan has got off to a slow start. ![]()
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