Amidst the popularity of Bitcoin and USD all over the world, will a new digital currency disrupt the flow of the two top currencies? Learn more about them here. China is known for utilizing Alipay and Wechat Pay for regular transactions, whereas they have been recognized as the highest rate in the world for using […]
Amidst the popularity of Bitcoin and USD all over the world, will a new digital currency disrupt the flow of the two top currencies? Learn more about them here.
China is known for utilizing Alipay and Wechat Pay for regular transactions, whereas they have been recognized as the highest rate in the world for using digital transactions since 80% of its citizens are using the platform.
With this, the government saw the opportunity of producing their own digital currency, similar to that of Bitcoin, and envisioned that it could influence people around the world to use their currency aside from USD.
Instead of paying through banknotes, China’s cryptocurrency will make it easier for users to transact just by using their smartphones. The government plans to create digital cash similar to that of a banknote or a coin that will be placed inside digital wallets.
In fact, China’s cryptocurrency has already been established in some parts of the country including Xiong’an, Suzhou, Chengdu, and Shenzhen.
Despite China’s claims that the new digital currency is produced to ease regular financial transactions, Trivium China co-founder and head of economic research Andrew Polk stated otherwise, mentioning that, ‘This has very strong political will behind it.’
Even Aaron Brown, a crypto investor, stated, ‘China’s goal is not to make payments more convenient, but to replace cash, so it can keep closer tabs on people than it already does.’
Furthermore, Eric Rosenbach and Aditi Kumar of the Harvard Kennedy School mentioned that China’s newest digital currency will be a challenge to USD and BTC, and ultimately, it could hamper the USD dominance. Also, there will be transactions that no longer need dollar-based payments because people could go directly with Yuan.
Once China’s citizens support the idea, there would be a high chance that China’s cryptocurrency will be a success and could threaten USD’s dominance in the long run.
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