“Red envelopes”, referring to the traditional cash prize distribution, will be distributed to 200,000 winners and they will have to download an app to use the prize for purchases at designated locations. in the city. Those who want to buy lottery tickets can register from 6/6. The winner will be announced a few days later and will have to spend the prize money by June 20. China is a promising player in the global race for central bank digital currencies (CBDCs) and has conducted trials in several major cities such as Shenzhen and Shanghai. The trial in Shenzhen in January awarded a reward of 20 million yuan. The People’s Bank of China (PboC) aims to be the first major central bank to issue an eCNY, part of an effort to internationalize the yuan and reduce its dependence on the global banking system without USD prevails. eCNY may also weaken Ant Group’s Alipay and Tencent’s WeChat Pay in payment systems.

According to the Bloomberg Over the past time, many international experts have expressed concern about China launching a national digital currency. British historian Niall Ferguson predicts that the digital yuan threatens to threaten America’s dominance in the global financial industry. Michael Hasenstab, head of investment fund Franklin Templeton, said that the digital yuan will weaken the position of the dollar, the reserve currency in the world. The administration of US President Joe Biden is studying the potential threat of the digital yuan to US national interests. However, those who are actually using their digital NTD are indifferent. Shenzhen is the city that runs the largest-scale digital yuan testing campaign. Reply Bloomberg Participants said they were not interested in leaving Ant Group or Tencent Holdings’ online payment apps. Online payment apps have been replacing cash in China for a long time. Photo: Getty Images. No conversion is intended “I’m not excited at all”, Bloomberg quoted Patricia Chen, who works in the telecommunications industry, as saying. She is one of more than 500,000 Shenzhen residents eligible to participate in the digital yuan trial. In this test, participants will download the government’s e-wallet application on their phones, connect to their bank accounts, and can convert up to 10,000 yuan ($ 1,548) in cash to digital currency. number (e-CNY). Similar to Alipay’s Ant Group app and Tencent’s WeChat Pay, digital yuan transactions are done very quickly using QR codes. When there is no Internet, users can use near field communication technology to make payments. Vera Lin – 25, an employee of a financial company in Shenzhen – said using digital yuan is quite easy. However, she has no intention of switching to digital yuan as the current online payment applications work seamlessly with other e-commerce services and platforms. Many people in Shenzhen said they have no intention of switching to digital yuan altogether. Photo: Reuters. Many stores participate in a trial of a 10% discount on digital yuan customers. However, that was not enough to convince Lin. She said Ant Group or Tencent’s platforms often offer discounts on many services, from ride-hailing to food delivery. Privacy is also a concern for Jan Chen, a 33-year-old civil servant. “The fact that the authorities can track every payment transaction is scary,” Chen said. I’m not excited at all User Patricia Chen In addition, some merchants and store owners revealed that they are concerned that information about all transactions goes directly to government databases even though the People’s Bank of China (PBOC) previously secured most of the delivery. translation will be confidential. In March, a representative of the Institute of Cryptocurrencies Research confirmed that PBOC will not directly know the identity of the user. However, the Chinese government may obtain information from financial institutions if it is suspected of illegal conduct. In addition, PBOC also encourages stores and merchants to use digital yuan by using free of charge. Currently, Alipay and WePay apps charge 0.6% per transaction. Difficult to take market share The yuan currently accounts for only 3% of total global payments. Expert Zennon Kapron, Director of consulting firm Kapronasia (Singapore) said that the digital version will only help the Chinese currency increase its market share by 1%. “The global impact of the digital yuan will be very small, unless China changes its economic structure and financial system,” said expert Kapron. Chinese officials themselves also show restraint when talking about the digital yuan. Last month, Mr. Li Bo – PBOC’s deputy governor – affirmed that China is developing a digital yuan to serve the domestic market, not with the intention of replacing the dollar. Previously, former PBOC Governor Zhou Xiaochuan said the digital yuan was a solution to help China fight the potential threat from cryptocurrencies like Bitcoin. Kapron predicts that if the digital currency fails to attract users, the Chinese authorities will take steps to increase the control of data collected by internet and financial companies such as Ant Group and Tencent. . Bloomberg Intelligence analyst Francis Chan also thinks that Chinese authorities can force Internet platforms and businesses to use the digital yuan. Chan and BI analyst Sharnie Wong predict that the electronic yuan will be widely used in China before the 2022 Beijing Olympics. It is likely that the digital yuan will take up 9% of the domestic online payment market share by 2025. That will be a big change, but the digital yuan still has a long way to go before the challenge. status of Alipay and WePay. These two payment applications account for a total of 90% of the market share in China. Expert Michael Ho, director of financial services at Oliver Wyman, also said that convincing the world to accept the digital yuan even more difficult.

China has big ambitions for the digital yuan – Photo: CGTN As China moves towards issuing the world’s first government digital currency, the debate about it is getting hotter than ever. Historian Niall Ferguson describes China’s e-yuan as a “dangerous challenge” to the US financial hegemony over decades. Meanwhile, Michael Hasenstab, chairman of investment firm Franklin Templeton, said e-CNY could undermine the role of the dollar as the reserve currency of the world. However, according to Bloomberg, when talking to people already using the digital yuan in China, the response was not very positive. APPEARANCE OF DOMESTIC USERS In Shenzhen – the tech hub is experimenting with using the digital yuan – most Bloomberg survey participants showed little interest in switching from popular mobile payment systems. currently such as Alipay of Ant Group or WeChat Pay of Tencent. Ant Group and Tencent are dominating the digital payment market in China with WeChat Pay and Alipay apps – Source: iResearch / Bloomberg Some are concerned that the digital yuan could be a tool for the authorities to access their financial data in real time. “I am not interested at all,” said Patricia Chen, 36, who works in the telecommunications industry, Chen is one of more than 500,000 people in Shenzhen eligible to test the yuan. While none of the Bloomberg survey participants had in-depth knowledge of the role of the digital yuan in the global foreign exchange market, their indifferent response showed the challenges faced by the administration. Chinese President Xi Jinping faces when he applies this currency at home and abroad. “I’m not interested at all” … “I’m afraid the authorities can track all my transactions” … E-CNY users According to Bloomberg, even if the Chinese authorities persuade or force citizens to accept the digital yuan, it will take a long time to do the same with international consumers and businesses. they have been wary of Beijing’s capital controls so far. With Vera Lin, 25, working for a finance company in Shenzhen, using the digital currency is not too difficult. However, Lin argues that users like her need a greater incentive to switch to the digital yuan altogether, because existing digital payment options are so reliable and work seamlessly within the platforms. other services, from social networks to e-commerce. Even a 10% discount on RMB purchases was not enough to lure Lin. The 25-year-old says platforms run by companies like Ant regularly offer discounts on everything from ride hailing to food delivery. Meanwhile, Jan Chen, a 33-year-old civil servant, is concerned about privacy issues. “I’m afraid the authorities can track all my transactions,” Chen said. China is testing the digital yuan in several provinces, including the largest scale in Shenzhen city, Guangdong province – Photo: Xinhua In a country where tax compliance is not as strict as China, many entrepreneurs are wary if information about their transactions is fed directly into government databases. Some fear that data from digital yuan transactions could be collected in real-time to monitor political disagreements or international businesses. competition with Chinese state-owned enterprises. Launched in 2014, the digital yuan project was promoted by then PBOC Governor Zhou Xiaochuan, who has long advocated the creation of a new international data currency to replace the dollar. . Zhou sees the e-CNY as a tool to counter potential threats from cryptocurrencies like Bitcoin or Facebook’s Diem (formerly known as Libra). THE COUNTRY IS HARD, IT’S ALTERNATIVE The PBOC has tried to quell these concerns by freeing the use of the digital yuan to retailers (they currently have to pay a 0.6% fee for transactions on Alipay and WePay), and pledged to that most of their transactions will be anonymous. In March, Mu Changchun, director of the PBOC’s Digital Money Research Institute, said the central bank would not directly grasp the user’s identity, but that they could get this information from financial institutions. in the event of a crime. Zennon Kapron, CEO of consulting firm Kapronasia, said that if the digital yuan is not gaining traction in the long term, the Chinese government may turn to coercive use. Beijing has begun to take moves to gain control over the data collected by technology and financial companies like Ant and Tencent. According to Francis Chan, a senior analyst with Bloomberg Intelligence, even if Chinese lawmakers do not go that far, they can ask for more co-workers from the vendors and operators of the Internet platform. digital yuan on your own payment options. “The e-CNY only partially solves the problem, which is the payment infrastructure part. However, just solving this problem does not help solve the whole problem “… Michael Ho, Director of Financial Services, Oliver Wyman Recently, the platforms MYbank (invested by Ant) and WeBank (invested by Tencent) have been added as options on the e-CNY application, although not yet available. Chan as well as Bloomberg Intelligence analyst Sharnie Wong forecasts that the digital yuan could be put into use across China before the 2022 Beijing Olympics and take 10% of the market share in electronic payments in the country by year. 2025. This is not a small number but still cannot compete with the dominant positions of Alipay and WePay – two e-wallets with total market share of over 90%. In the country it is difficult, to persuade international users to use the digital yuan is much more difficult. “The e-CNY only partially solves the problem, which is the payment infrastructure part. However, simply solving this problem does not help solve the whole problem, “said Michael Ho, director of financial services at Oliver Wyman, commented. Many people are skeptical of the ability to fulfill China’s ambitions to internationalize the yuan – Photo: Getty Images According to Zennon Kapron, on the international arena, despite its great ambitions, the digital version of the yuan is unlikely to boost the share of the Chinese currency’s global payments by one percentage point, from below. 3% current. Many analysts are also skeptical of the yuan’s international application ambitions in Xi Jinping’s plan to reduce dependence on the US-led financial system.

According to the Bloomberg Chinese tech giants like Jack Ma’s Alibaba and Tencent Holdings operate similarly to America’s Facebook and Alphabet. They mine user data to refine digital services. Data strengths will lead to better products. As a result, large technology corporations become richer, more powerful and easily dominate the market. Over the years, the Chinese government has gone further than the rest of the world in tightening control of the Big Tech group. In March, Beijing publicly plans to “rule” platform companies that accumulate data to monopolize and swallow smaller competitors. Chinese authorities fined Alibaba $ 2.8 billion for abusing their dominant market position. Dozens of other major Internet companies also spent a month correcting their anti-competitive practices. China is tightening control of major tech corporations, including Alibaba and Ant Group of billionaire Jack Ma. Photo: Reuters. Risk of nationalization of data Beijing is pouring money into digital infrastructure, drafting new data usage laws, and building new data centers across the country. China’s goal is to be at the forefront of economic transformation in the coming decades. “It’s not a short-term initiative. China really sees data as an economic engine,” said Kendra Schaefer, Head of Digital Research at Trivium China. According to the China Institute of Information and Communication Technologies, China’s digital economy grows much faster than GDP in 2019. Market research firm IDC predicts China will hold about 1. / 3 of the world’s data in 2025, or about 48.6 zettabytes, 60% more than the US. The Chinese regime’s challenge is to get big tech companies to join. Those are the organizations that hold the most data in a country of 1.4 billion people. Companies like Alibaba and Tencent have benefited when China blocked foreign companies like Google and Facebook. Now, they have to share those benefits Professor Zhao Yanqing At a Chinese economic forum, professor Zhao Yanqing at Xiamen University pointed out that big tech companies have to nationalize data. “Companies like Alibaba and Tencent benefit when China blocks foreign platforms like Google and Facebook. Now, they have to share those benefits,” he added. However, most analysts say that is unlikely. Nationalization of data can hamper innovation. Beijing is in need of technological breakthroughs as the US works with its allies to prevent China from making new strides. “China needs highly competitive companies,” said Associate Professor Lizhi Liu at Georgetow University. “Nationalization of data will hurt technology companies. If data is taken away, they also lose their motivation and ability to innovate,” the expert added. Beijing’s difficult position In recent years, Chinese lawmakers have turned their attention to security. According to a law in 2017, authorities will have access to most personal data when necessary, even requiring foreign businesses to store data of Chinese customers in the country. Chinese leaders are now stepping up the use of big data to improve government services. Firefighters can use data to respond more quickly to calls. Hospital data will help track people down and prevent Covid-19 from spreading widely. Data lays the foundation for everything from smart cities to financial regulation to surveillance activities against dissidents. The Chinese authorities are also developing the digital yuan, competing with Ant Group’s Alipay and Tencent’s WeChat Pay. These two platforms now dominate the Chinese mobile payments market. Ant Group’s Alipay and Tencent’s WeChat Pay now dominate the Chinese mobile payments market. Photo: Reuters. The digital yuan will allow the People’s Bank of China to collect huge amounts of data about people’s transactions. Authorities have also made significant progress in the corporate social credit measurement system, from paying taxes, protecting the environment to product quality. The Chinese authorities insist that they will not force businesses to deliver data. “As for the use, development and exchange of data, we are still exploring the mechanisms,” said Hu Jianhua, deputy general manager of the Guizhou Big Data Development Administration. “Enterprises have ownership of the data. We encourage, but do not force them to, disclose the data,” he added. Data privacy is China’s “biggest obstacle” in dealing with the tech giants Expert Angela Zhang of the University of Hong Kong Another solution is that the government also invests in businesses. Last month, Bloomberg reported that China has proposed to set up a joint venture led by the People’s Bank of China (PBoC) with major technology corporations. The joint venture will monitor the data of hundreds of millions of users. Financial Times reports that billionaire Ma’s Ant Group declined the proposal. However, according to Bloomberg , a few years ago, when not agreeing to share data with the PBoC, Alibaba and Tencent faced many troubles. “Data privacy is China’s ‘biggest stumbling block’ in dealing with the tech giants. There is a conflict in protecting user privacy and fostering competition among these giants. Different backgrounds, “commented Angela Zhang, director of the China Law Center at the University of Hong Kong. China’s biggest companies are also looking to reduce damage from Beijing’s new rules. After Alibaba’s investigation is over, CEO Daniel Zhang said the company will continue to work with the data privacy regulator. Last month, Tencent’s Pony Ma proposed stricter rules for Internet businesses, including Tencent. He also has a “voluntary meeting” with the country’s antitrust agencies.