It is reported that China’s digital currency project still has serious problems. There are reports that some Chinese state workers who are paid in “e-CNY”, or digital yuan, are barely using it and are converting it to real cash.
According to a May 13 report in the South China Morning Post, some Chinese cities have started paying government employees in CBDC, but most early adopters have immediately converted it to cash.
“I prefer not to keep my money in the e-CNY app because there is no interest if I leave it there,” said Sammy Lin, an account manager at the State Bank of China in Suzhou.
“Also, there are not many places where you can use e-yuan, whether online or offline.”
Civil servant Andrew Wang said he was not overly concerned about the digital cash idea because only a small portion of his salary was paid in digital yuan.
However, his wife, who receives her entire salary in digital Yuan, withdraws the entire amount in regular cash the moment she receives her salary due to the lack of utility of digital currency.
“She cannot deposit money or purchase financial products with her e-CNY wallet,” Wang said.
Although China has been known as a “functionally cashless” society for over a decade, many Chinese citizens are hesitant to use purely digital currencies such as the digital yuan due to widespread fears of surveillance and limited use cases, according to a report from SCMP. do.
Despite these concerns, according to former People’s Bank of China Governor Yi Gang, as of July 20, 2023, more than $250 billion has been transacted via the digital yuan.
Ye Dongyan, a researcher at Beijing Chengkung Business School, said more needs to be done to balance privacy and security if the government wants to introduce a digital yuan across China.
“Pain is anonymous, but digital yuan is different. “More reflection is needed on the line between information tracking and information security protection.”
Related: Hong Kong Issuer Seeks Spot Bitcoin ETF for Mainland China
CEO Kang said that the privacy protection issue of new CBDCs is the “biggest challenge” in the digital finance era.
Despite the privacy concerns shared by program participants, Gang said at a Beijing forum in March that the digital yuan can “fully protect personal information” through “controllable anonymity.” This means that micropayments cannot be tracked. For bigger ones.
Since CBDC was introduced in 2020, several jurisdictions in China have been working to promote CBDC adoption, with several cities providing more than 180 million Chinese yuan ($26.5 million) through subsidies and consumption coupons.
Magazine: The Bitcoin Man,