We already talked months ago about the digital yuan, the digital currency that China wants to implement in the country, a currency that has already begun to take its first important steps.
Now the success of a pilot has been announced in the city of Suzhou, near Shanghai, where 7 euros in digital currency were delivered to 181,000 consumers, free money in digital wallets to spend in specific stores for five days, from 1 to 5 of May.
It was just one trial that was part of a larger one involving 500,000 consumers in 11 Chinese regions, and had a tremendous success.
To use the money, users have to download an app, a digital wallet. With it they can buy in thousands of participating stores and receive discounts.
The technology behind it is a authorized blockchain, which means that Banco Popular decides who can use it.
But this currency will not be used only within China, they are preparing a platform to make the currency is internationally viable, although that step will be slow and very controlled.
In the West things are slower. They are more concerned with privacy when all transactions are publicly visible on the blockchain, and with the effect on retail banks.
Regarding the advantage, have:
– No fee of service.
– The speed of payments it can be faster than with traditional methods.
– No need to banks.
– It is backed by the government (issuing digital yuan is the same as issuing cash in circulation).
– I would not depend on the dollar in international transactions, you would have more freedom and SWIFT would not be necessary.
On the other hand, countries that do not adopt digital currencies could find that their central banks lose control over monetary policy against cryptocurrencies, the world of economics would be separated between the adepts and the non-adepts of this technology.
What is clear is that the West has to put the batteries to create its own digital currencies if they do not want only China to dominate this sector in a short time.