Mixed Reactions after Week-Long Public Test on Digital Yuan by…

Mixed Reactions after Week-Long Public Test on Digital Yuan by…

October 20, 2020

Although the People’s Bank of China (PBOC) has not officially released a report on the test, analysts are positive on the overall score on the digital yuan public test.

The People’s Republic of China through the People’s Bank of China (PBOC) completed the one-week-long public test on the new Digital Yuan at the city of Shenzhen. However, there are mixed reactions on the project from the public opinion, analysts view and also from the Chinese regulators.

A selected group of Shenzhen residents received 200 digital Yuan in their digital wallets. The roughly $30 was used at designated outlets for easier monitoring. Having ended yesterday on Sunday, the test has been put under scrutiny by analysts, and other different market players.

China is seeking to spearhead the race on the central bank digital currency alias CBDC and as a result, overthrow the U.S. dollar as a global reserve currency. Notably, the country has been working on a project to make the existing blockchain projects interoperable, hence scaling the blockchain industry. It is a noble initiative that is meant to steer forward the crypto industry especially crypto adoption by both retailers and institutional investors. However, there are fears the country will have a huge control on the overall technology hence capable of spying and controlling global financial markets.

With China’s past history on data security management, the success of the digital yuan in the local market will significantly influence its global adoption. In addition, other countries can borrow from China’s experience in developing a successful digital currency.

Recently, the United States’ Federal Reserve, Japan’s Central Bank, Bank of England and Bank for International Settlements (BIS) collaborated to research on the best form of CBDC that can be implemented for the greater good.

The competition will on the bigger picture benefit the blockchain industry and the cryptocurrency industry. Moreover, digital assets and currencies can largely aid in flattening and reversing the coronavirus curve by avoiding human contacts through money exchange.

Digital Yuan Week-Long Test Review

According to media outlet Reuters, there is a faction of the public that feels the predominant payment methods like Alipay are much better than using the digital Yuan. Although the People’s Bank of China (PBOC) has not officially released a report on the test, analysts are positive on the overall score on the digital yuan public test.

According to Wang Shibin, co-founder of the cryptocurrency trading platform HKbitEX, “The event last week really means that the (digital yuan) has already moved from theoretical internal testing to real world practice.”

Notably, according to Shenzhen residents interviewed by Reuters, Alipay and WeChat that have been in the market for a long time offer similar services as the digital Yaun. Hereby choosing the former over the latter.

Perhaps the People’s Bank of China (PBOC) might be compelled to use incentives to propel the project ahead of the existing competitors. However, with China’s unpredictable nature, other radical mechanics might be deployed.

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