Editor's note: In recent years, China has been promoting the digital yuan. Six major state-owned banks in China have begun taking public applications to open trial digital-yuan wallets. What is exactly digital currency? How is it different from WeChat pay and Alipay which dominate payment systems in China? How will the popular use of digital currency influence society? Qu Qiang, assistant director at the International Monetary Institute of Renmin University, shared his views.
In his opinion, digital money has a lot of advantages. For example, it is safe and fast. It doesn't rely on commercial banks and can be stored in encrypted sim cards or chips inside mobile phones saving time in the process. He states that the Chinese government has made a very bold and pioneering decision to launch China's central bank digital currency (CBDC). First of all, it will help reduce the use of paper notes. The proliferation of fake paper notes is a serious issue facing many countries. Also, the CBDC enables the great development of online shopping. What's more, its launch will be a good thing for vulnerable groups. China is such a large country that it's very hard to help all its citizens to open a bank account. With digital money right now, you don't need to open a bank account. With just a legal ID card, you can open a digital currency account.
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