China’s cryptocurrency is expected to be a huge success in the global finance sector until pilot schemes are widely implemented.
China introduced a digital edition of its physical money, the renminbi (RMB), last year. The People’s Bank of China (PBOC), China’s national bank, manages and distributes the virtual money to other state-owned financial institutions and online payment services like Tencent’s WeChat and Ant Group’s Alipay.
Wang Dan, chief economist at Hang Seng Bank (China), stated that, “With the central bank’s digital money, it can actually reinvent how the modern business is done,”
According to her, the digital RMB will transform financial system funding and financing, capital transfer inside and around borders, and how business transactions are conducted.
While concerns regarding data protection have been posed in the use of the digital RMB, Tang Ling, vice chairman of Tsinghua University’s Blockchain and Finance Research Center, is optimistic in the national bank’s management of privacy protection.
Tang believes that the national bank will effectively ensure the protection of customers’ records, which will enable the bank to adapt Chinese financial activities.
Furthermore, he said, the use of the digital RMB could aid the administration’s attempt to combat illicit activities like money laundering and tax evasion. “Because the central bank’s digital RMB is essentially a basic means of payment nationwide, there will be legal and administrative measures to restrict and guide its use.”
The Beijing-based Edge Computing Research Institute and the PBOC established a significant partnership agreement in the previous week to promote the use of the digital RMB in businesses.
The virtual RMB will also be a huge part of an upcoming international festival, the Winter Olympics, which will potentially encourage more people to use it. The Beijing Municipal Science and Technology Commission has stated that it is expediting the deployment report.