Since the coronavirus spread began, there has been a steep rise in cashless payments. With fears of the virus spreading via banknotes, people are relying on mobile payments in China and around the world. Last month, the UAE Central Bank encouraged the use of online and digital services “as a measure to protect the health and safety of UAE residents.” It further increased the maximum payment limit for contactless bank cards. The central bank also directed banks to refill ATMs with new banknotes to prevent the spread of the virus.
China’s digital currency could reduce reliance on the US dollar.
The People’s Bank of China is expected to launch its digital currency sometime this year as the bank revealed that issuing digital yuan is among their top priorities. The chief executive of digital savings company DeFiner, Jason Wu, said that the digital currency would allow China to “sidestep” a US-dominated financial system and reduce reliance on the US dollar. Several other experts also believe that it may set China up to become the leader in a globalized digital economy for transactions.
China is on its way to becoming a cashless society.
The People’s Bank of China has been researching its centralized digital currency for more than five years. The bank is planning to issue the digital currency dubbed as DC/EP soon. Earlier, it was reported that franchises like McDonald’s, Starbucks, Tencent, and Alibaba. According to CGAP, a financial inclusion think tank in Washington DC, Chinese tech giants Alibaba and Tencent established digital merchant payments around 2014, leading a transition away from cash, where they now account for 90% of the $17 trillion mobile payments market. The Chinese digital yuan is a currency that behaves much like standard cash, but exists only as code in a digital wallet, backed by the People’s Bank of China.
The issuance of digital currency by China is a big step towards digitalizing the finance market, but it has also received criticism from the crypto community as authorities in China could use this centralized currency for mass surveillance of people’s financial activities.
