part 1. “focused on the chinese digital yuan“
the war between leading global financial companies, led by china and the united states, over digital currency hegemony is in full swing.
the leading country in digital currency is china (people’s republic of china). china has already established itself as a leader in digital currency based on the world’s largest mobile payment market of twenty-six trillion dollars.
the english name of the chinese legal digital currency is dcep (digital currency electronic payment) instead of cbdc. dc is digital currency and ep (electronic payment) is implementing the electronic payment method project. dcep is a fiat currency that has the same function as cash, and refers to an electronic payment method that cannot be rejected by any payment entity in china.
what is china trying to achieve by issuing dcep?
first, there is an intention to reintegrate the mobile payment system, which had been scattered by private companies such as wechat pay and alipay, at the initiative of the government.
in particular, the digital payment market, which is monopolized by alipay and wechat pay, has become so influential that concerns and adjustments are needed. alipay (approximately 55% as of 2020) and wechat pay (approximately 40%) account for about 95% of the total market, thus exerting enormous influence to virtually control the chinese digital payment market. to be.
it is an ambitious project to put the privately led mobile payment market under government control by issuing and distributing to major commercial banks by the people’s bank of china, and allowing individuals to freely withdraw and use digital currency through their bank accounts. currently, mobile payment methods can be selectively rejected according to wechat pay or alipay for each business ecosystem, but dcep cannot be rejected because it is a fiat currency issued by the people’s bank of china.
china wants to break free from its dominance over the $100 usd bill, which costs only 40 cents a sheet. china intends to create the foundation of china’s digital economy by first commercializing digital currency and leading the global financial market by preoccupying the future financial tech market.
in china, which is accelerating the digital yuan pilot project and dissemination day by day, six state-owned banks and internet banks have already supported digital yuan and alipay has been applied. china’s digital economy was 5.5 trillion dollars last year, accounting for 36.2% of its gross domestic product (gdp).
ultimately, it plans to expand to the whole country for the 2022 beijing winter olympics, and this year’s system tests were completed in april of this year, and a large-scale digital yuan use test was conducted in suzhou in may.
unlike general digital pay, it is characterized by being able to pay as if using cash by contacting a smartphone even when there is no internet connection. in addition, in the case of offline payment, the mobile payment service receives the settlement immediately like cash, whereas the mobile payment service has to wait until the time of settlement. in dalian, for the first time in china, it is possible to pay, borrow, and repay public housing funds in digital yuan. (continued next)
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