Last Friday, China unveiled its local digital yuan at the 2022 Beijing Winter Olympics to show global competency.
Sadly, some residents, visitors, and government officials appear displeased with the digital token.
By the end of December, nearly 8 million merchants recognized the digital yuan, which utilizes in transactions totaling 87.6 billion yuan ($13.8 billion).
At the Winter Olympics, popular e-payment platforms like Alipay dominated. Another participant noted that “foreigners” preferred Visa cards.
Despite these negative preconceptions, China has already pushed for NFC-enabled smart cards, RMB-themed promotions, and other digital payment options.
Challenges and Threats
While the government is adamant about this move, the People’s Bank of China is wary of enforcing virtual currencies completely. Because cryptocurrencies are illegal in the country due to financial instability and corruption, the central bank is in charge of digital currency.
Another difficulty with the e-CNY is the question of privacy. Digital wallets give varying levels of security and safety nets, according to Cornell economist Eswar Prasad.
Customers and regulatory features abound in high-end digital wallets that let users store significant amounts of money. Low-grade digital wallets, on the other hand, require merely a mobile number and only provide transactional anonymity.
Anything digital, according to Prasad, will eventually be traceable. That is because no central bank wants its money to spend without the transactions being auditable and verifiable.
E-CNY’s Long Term Prospects
Despite all of these problems, the e-CNY is not going away.
In January of last year, the central bank stated that over 250 million people had downloaded the wallet application. By October, it had approximately 500 million users.
Alibaba even produced a Winter Olympics-themed non-fungible token (NFT), which they call “digital collectibles” and could not resell.
Alibaba also plans to distribute 8,888 tokens featuring speed skaters, slopestyle skiers, aerial freestyle skiers, and figure skaters.
These digital relics will be available till the 20th of February on Taobao and Tmall.