The Chinese government is developing a digital currency to provide more options for the country’s financial system. This comes after the success of the country’s first electronic payment system, Alipay, which has helped people make mobile payments.
The move could have significant implications for the future of finance, not just in China but around the world. As more countries adopt digital currencies, they might no longer rely on traditional banks and governments for financial transactions.
Read on to learn more about why China is moving towards the digital yuan.
Bitcoin Concerns
One of the biggest criticisms of China’s new digital currency is that it could weaken Bitcoin. Bitcoin is a cryptocurrency, or digital money, created and stored electronically. It’s not related to any country or institution, and its value isn’t determined by anything but supply and demand on virtual currency markets. Bitcoin was initiated in 2009 by a mysterious programmer named “Satoshi Nakamoto,” who left the project in 2010.
Since then, Bitcoin has been embraced by libertarians as an alternative currency unconnected to governments or banks. However, China might successfully create its digital currency to better compete with Bitcoin. If people start using China’s digital yuan more often than Bitcoin for their transactions, it could affect the value of Bitcoin itself.
If you’re invested in Bitcoin, this news may cause some worry about how your investments will fare in the future. But there are ways to keep your money safe from these fluctuations and continue earning money from your investments over time – talk to an investment advisor today.
China Widely Adopting Digital Currency
China is one of the first countries to adopt a digital currency. It’s called the “digital yuan” or “e-yuan.” The goal: To provide more options for China’s financial system.
The country’s newest electronic payment system, Alipay, is helping people make mobile payments, and the government wants to take it one step further by developing an entirely digital currency. This would give citizens more options for spending their money and help businesses expand in China.
93% of global payments are made using cash and checks today. But people have been quick to adopt new technologies in China – over half the population uses smartphones, and many use them to pay for goods without cash or credit cards. So, it makes sense that China is looking into ways to keep up with this change by adopting a digital currency.
The move could also have significant implications for the future of finance in China and worldwide. As more countries adopt digital currencies, they might no longer rely on traditional banks and governments for financial transactions. For example, if you’re a Chinese citizen who wants to send money digitally from your account in Beijing to New York City. You only need an app with access to your bank account and an internet connection through your phone. The process can take seconds – much faster than wire transfers which can take days and cost about $3 per transaction.
Conclusion
We may not need physical cash to pay for things in the future. And the broader adoption of a digital currency like China’s Yuan will make it possible for us to live in a cashless society. It’s not too far-fetched to think that you might not even need to carry your wallet with you one day in the future.
