We are creating some awesome events for you. Kindly bear with us.

China’s Digital Currency Strategy

Image credits: china-briefing.com

China has been at the forefront of experimenting with a digital currency, with almost 21 million people taking part in digital yuan (e-CNY) tests through June, according to the People’s Bank of China (PBOC). A digital yuan offers better data for the PBOC—China’s central bank—and other government bodies. The more the digital currency is used, the more the government has instant awareness of purchases and transfers, even knowing the geographic location of activity.

Using digital yuan also means greater consumer efficiencies and analytics. Look to a new generation of freemium and bank-linked financial planning and insight activity. The Digital yuan system can make all the payments on many things including transportation, food, and entertainment.

Digital yuan allows for a greater ability to monitor as the Chinese government believes in control. A digital yuan can be used to steer people away from other digital currencies and bitcoin variants, which in turn keeps the data onshore. This control could be equally used to counter money laundering and other illegal activities. The Digital yuan system could also disintermediate other payment mechanisms.

A digital currency gives the yuan greater utility and the PBOC deserves credit for its willingness to experiment. Although there has been significant liberalisation in recent years there are still capital controls in China and the yuan is not freely convertible. The yuan in global finance could become quite significant in the coming decades if China adopts inflation targeting, substantially cleans up its banking system, opens up its capital account and allows its currency to freely float.

The introduction of a digital yuan will bring benefits to Chinese consumers and society, facilitate government data collection and monitoring, but will not have a material impact on the yuan’s international status.

Nonetheless, it poses an interesting question to financial leadership in the U.S. and Europe as to whether they also have the capacity to innovate and experiment. According to an article, China’s sovereign digital currency program, Digital Currency Electronic Payment (DCEP), has launched one of the largest real-world trials in several cities over the last few months. By May 2020, China had already filed more than 120 patent applications for its official digital currency (alternately referred to as digital yuan in this article), more than any other country.

PBOC has given the green light to conduct hypothetical-use tests of the digital yuan in several regions – Beijing-adjacent Xiong’an New Area, Shenzhen, Suzhou, Chengdu, and the Beijing 2022 Winter Olympic Games locations.

In the latest digital currency trials, Suzhou municipal government announced that it would give away 100,000 digital red packets, each containing RMB 200 (US$31) and totalling RMB 20 million (US$3 million), to residents via a lottery. Suzhou has been spearheading the digital currency trails. Since May, some Suzhou government employees have been receiving their transport subsidies in the form of digital currency.

China’s central bank is responsible for issuing and distributing the digital yuan to commercial banks. Commercial banks will then channel the digital money to end users. So far, China’s four major state-run banks – China Construction Bank, Bank of China, Industrial and Commercial Bank of China, and Agricultural Bank of China – have started large-scale internal testing of the digital RMB wallet.

As reported by OpenGov Asia, China’s monetary authorities will designate more payment service institutions to develop digital RMB electronic wallets with complicated functions to satisfy various types of payment needs. The digital RMB e-wallet with smart contracts has a new feature that allows users to implement payment autonomously under certain conditions and rules.

This system can prevent the illegal withdrawal of funds deposited in prepaid accounts. The digital RMB is expected to be one of the world’s first major sovereign digital currencies, and the central bank is gradually expanding its trials.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

Send this to a friend