<![CDATA[<figure class="image"><img src="https://cimg.co/news/124242/327988/0509-china.jpeg" alt="The exterior of the Shanghai branch of the central People&rsquo;s Bank of China (PBoC)." srcset="https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_1250_833.jpeg 1250w, https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_1200_800.jpeg 1200w, https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_900_600.jpeg 900w, https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_720_480.jpeg 720w, https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_600_400.jpeg 600w, https://cimg.co/news/124242/327988/responsive-images/0509-china___media_library_original_300_200.jpeg 300w" sizes="100vw" width="1250" class="content-img"><figcaption>Source: Robert/Adobe</figcaption></figure>A <a href="https://cryptonews.com/tags/china">Chinese</a> central bank chief has claimed the <a href="https://cryptonews.com/tags/digital-yuan">digital yuan</a> will revolutionize the way the nation makes retail payments, and suggested the <a href="https://cryptonews.com/tags/CBDC">CBDC</a> could one day &ldquo;completely replace&rdquo; cash.Per <a href="https://www.yicai.com/news/101850381.html" rel="nofollow">Yicai</a>, Mu Changchun, Head of the Digital Currency Research Institute at the People&rsquo;s Bank of China (PBoC), made the comments at the China International Financial Annual Forum this week.Mu <a href="https://cryptonews.com/news/chinas-central-bank-official-stresses-use-of-digital-yuan-retail-sectors.htm">said it would be important to ensure that the digital yuan was accepted &ldquo;in all retail payment scenarios&rdquo; in Mainland China</a>.He also called on the PBoC&rsquo;s banking and e-pay provider partners to streamline their QR code technical protocols.At present, wallets are hosted by the PBoC or a number of mainly state-run banks.The private-sector e-pay powerhouses WeChat Pay and Alipay have also <a href="https://cryptonews.com/news/wechat-pay-interoperability-another-key-breakthrough-for-digital-yuan-pilot.htm">added e-CNY functionality to their apps</a>.But all of these partners have thus far sought to integrate e-CNY payment options with their own conventional pay interfaces &ndash; rather than with one another&rsquo;s offerings.This fact, Mu suggested, means that merchants can face IT-related adoption issues with their POS devices.The <a href="https://www.scmp.com/tech/policy/article/3233367/chinas-digital-yuan-head-urges-unification-qr-codes-alipay-wechat-pay-pboc-pushes-e-cny-adoption?utm_source=mandrill&amp;utm_medium=email&amp;utm_campaign=enlz-NOT-Follow&amp;utm_content=20230905_daily5&amp;d=a29db3c9-8875-456e-95e9-310774935692" rel="nofollow">South China Morning Post</a> quoted Andrew Fei, a partner at the Hong Kong law firm King &amp; Wood Mallesons, as explaining:<blockquote>&ldquo;A single, unified, and standardized QR code that supports e-CNY payments as well as Alipay, WeChat Pay, and existing electronic payment methods can incentivize more widespread use of e-CNY by making it more convenient for consumers to use, and for merchants to accept, e-CNY in the retail context.&rdquo;</blockquote><figure class="media"><oembed url="https://twitter.com/ZongyuanZoeLiu/status/1698937230335615476"></oembed></figure><h2 id="chinas-digital-yuan-new-adoption-drive">China&rsquo;s Digital Yuan: New Adoption Drive?</h2>Mu added that banking and e-pay partners also needed to perform a series of upgrades to help drive further CBDC adoption efforts in the retail payments sector.But analysts have claimed that Mu&rsquo;s comments were actually aimed at retailers, not partner financial institutions.Jie Hu, a Professor at the Shanghai Jiao Tong University&rsquo;s Advanced Institute of Finance, opined:<blockquote>&ldquo;[Mu] is saying that all merchants should get ready, both in terms of their willingness and their tools, so that if customers want to pay with e-CNY, they must accept it.&rdquo; &nbsp;</blockquote><figure class="image"><img src="https://cimg.co/news/124242/327989/caixin.jpg" alt="A Chinese customer pays using the digital yuan, in a Weibo post shared by the news outlet Caixin." srcset="https://cimg.co/news/124242/327989/responsive-images/caixin___media_library_original_835_778.jpg 835w, https://cimg.co/news/124242/327989/responsive-images/caixin___media_library_original_720_671.jpg 720w, https://cimg.co/news/124242/327989/responsive-images/caixin___media_library_original_600_559.jpg 600w, https://cimg.co/news/124242/327989/responsive-images/caixin___media_library_original_300_280.jpg 300w" sizes="100vw" width="835" class="content-img"><figcaption>A Chinese customer pays using the digital yuan, in a Weibo post shared by the news outlet Caixin. (Source: Caixin/Weibo/Screenshot)</figcaption></figure><h2 id="toward-a-cashless-society">Toward a &lsquo;Cashless Society?&rsquo;</h2>But Mu&rsquo;s wider goal is likely a radical reduction in China&rsquo;s dependence on cash, or even a total elimination of analog forms of currency.He said:<blockquote>&ldquo;In the future, commercial electronic payment tools may fully meet the needs of the digital economy and society and completely replace cash.&rdquo;</blockquote>The &ldquo;digital economy&rdquo; has become a buzzword in Chinese political circles in recent years, and the PBoC is determined to lead the world in CBDC and &ldquo;cashless society&rdquo; drives.Other Asian nations, <a href="https://cryptonews.com/news/south-korean-central-bank-set-unveil-cbdc-blueprint-next-month.htm">such as nearby South Korea</a>, have also launched IT-powered &ldquo;cashless society&rdquo; drives of their own.The state-run media outlet <a href="https://english.news.cn/20230706/5c897da92ff1453b93aa4f63a840b297" rel="nofollow">Xinhua</a> last month published an interview with Kent Matthews, a Professor of Banking and Finance at the UK&rsquo;s Cardiff University.In the interview, Matthews stated that the proportion of cash in terms of the total amount of yuan in circulation had &ldquo;dropped to 3.7%&rdquo; and &ldquo;is continuing to fall.&rdquo;Matthews said that China was &ldquo;on track to becoming the world&rsquo;s top country for cash-free transactions,&rdquo; although he claimed it would &ldquo;be impossible for any government to legislate cash away.&rdquo;<figure class="image"><img src="https://cimg.co/news/124242/328009/mob-china.jpg" alt="A grpah showing the number of mobile internet users using mobile payment in China from 2016 to 2022." srcset="https://cimg.co/news/124242/328009/responsive-images/mob-china___media_library_original_1000_743.jpg 1000w, https://cimg.co/news/124242/328009/responsive-images/mob-china___media_library_original_900_669.jpg 900w, https://cimg.co/news/124242/328009/responsive-images/mob-china___media_library_original_720_535.jpg 720w, https://cimg.co/news/124242/328009/responsive-images/mob-china___media_library_original_600_446.jpg 600w, https://cimg.co/news/124242/328009/responsive-images/mob-china___media_library_original_300_223.jpg 300w" width="1000" class="content-img"></figure>The academic noted:<blockquote>&ldquo;People are using cash much less today than they were 10 or 20 years ago. The trend toward a cashless society is inexorable.&rdquo;</blockquote>Mu further claimed that existing inter-bank payment and clearing systems can still &ldquo;meet the needs of China&rsquo;s economic development.&rdquo;He said that there was &ldquo;no need to replace&rdquo; existing networks with the central bank&rsquo;s digital currency system.The PBoC chief claimed that conventional and CBDC networks &ldquo;can be fully interoperable and seamlessly connected.&rdquo;Mu concluded that CBDC smart contracts could be used to boost the efficiency of Chinese wholesale payments.
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Digital Yuan Will Revolutionize Chinese Retail Payments – Central Bank Exec

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