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China could launch its central bank currency without anyone noticing

June 15, 2020

China is a global leader in the development of the digital currency issued by the central bankor CBDC, which fuels speculation about the country’s national and international ambitions for its CBDC.

Glenn Woo, head of the general ledger vault for the Asia-Pacific region, predicted this in an interview with Cointelegraph China’s virtual state-backed currency will be the first to be launched worldwide.

Woo emphasized the speed with which the Chinese government can implement important initiatives at the national level. This suggests that the CBDC’s first tests with 19 companies, including Starbucks and McDonalds, could increase rapidly and include a much larger pilot. He said:

“I think when it arrives, it will be one of the first real CBDCs, not the first, with a real global use case.”

“Nobody will tell the difference”

China could launch its central bank currency without anyone noticingChina could launch its central bank currency without anyone noticing

Many analysts have postulated that China is trying to regain control over domestic payments through its CBDC, and Woo estimates that more than 96% of AliPay’s or WeChat Pay’s small retail stores are operated.

However, Woo offers a more nuanced explanation that says so The growth of digital payment platforms has been approved by the Chinese central government and has been aligned with many of the regime’s goals, with the vast majority of the country’s financial activities centralized on a handful of financial platforms, including rural areas that were previously outside the country’s government scope.

Woo predicts that the CBDC will be integrated into existing digital payment channels, which hardly disrupts Chinese economic activity and at the same time offers the government more control and insight into the country’s retail economy:

“From the perspective of the retail user [tú] You wouldn’t necessarily know what changed, it will be the same, “said Woo.” You will continue to use WeChat, the super app, to do many different things: shopping, calling taxis, transferring money, you know, delivering the red packages. during the holidays and so on. “

“It will be perfect, nobody will know the difference,” he added.

China uses CBDC to avoid US dollars in world trade

Internationally, Woo predicts that China will use its CBDC as a means of promoting trade in Chinese currency.

Woo predicts that China will try to motivate its trading partners to reach an agreement with its CBDC and expects the government to try to increase its CBDC’s use for international trade, especially with countries that depend on Chinese imports are.

However, Woo doubts that such a strategy will be very successful in the short term and notes that protectionism is increasing worldwide in the face of the economic downturn.