China's "DIGITAL CURRENCY"

 CHINA STEPPING FORWARD TO DIGITAL CURRENCY

    

                         China will begin trialling payments in its new digital currency in four major cities from next week, according to domestic media.In recent months, China’s central bank has stepped up its development of the e-RMB, which is set to be the first digital currency operated by a major economy.  

                      Digital payment platforms are already widespread in China, namely Alipay, owned by Alibaba’s Ant Financial, and WeChat Pay, owned by Tencent, but they do not replace existing currency.

Progress on the digital currency :

                                The sovereign digital currency, which will be pegged to the national currency, has been under development for some years but in August the bank said it was “almost ready”. 

                         “A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level,” last week’s China Daily report said.

                          “It may also facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption.”

                          A decline in cash usage is expected to continue amid the growing popularity of digital payment platforms and as people avoid physical contact during the coronavirus pandemic. 

Using China’s digital currency: 

   

                            Digital currency transactions could be made through NFC on smartphones, the same technology used by Apple, Google, Samsung and others to allow people to pay by waving their phones at a special terminal.

        “The digital currency can be conveniently used without the internet,” Dong said.
        “Users can make transactions or payments by bringing two mobile phones with electronic wallets close to each other.”
         Dong’s explanation sounds similar to how many digital wallets work these days. Users can exchange money in their bank accounts for the digital currency, which is then deposited in an electronic wallet, Dong said.