With digital yuan pilots underway in China, the currency does not appear to be meeting government expectations. A recent report highlighted a series of interviews with people at the hotspot, reflecting a lackluster reception among attendees.
Privacy concerns reported
According to Bloomberg, residents of Shenzhen, the Chinese analogue of Silicon Valley, have shown little interest in the central bank’s digital currency (CBDC), largely because of privacy and surveillance concerns.
People’s Bank of China (PBoC), the country’s central bank, is accelerating pilot projects to prepare the digital yuan for the 2022 Winter Olympics. People were reluctant to switch from existing mobile payment solutions, showing an attachment to WeChat and Alipay. One participant in the pilot sample of 500,000 people told Bloomberg that she was “not at all thrilled” to be accepted. Another feared the pilot would allow authorities to “track every payment” and called the currency “a little scary”.
Will the digital yuan be satisfied with purely domestic acceptance?
Li Bo, the governor of the PBoC, pointed out that the digital yuan is not aimed at replacing the US dollar. Instead, the government aims to use it widely for domestic purposes.
Bo’s statements deviate from the generally optimistic tone that is held against the currency’s global potential. However, it is now clear that the government is facing major challenges in attracting domestic users as well. Detaching them from a firmly entrenched financial infrastructure of Tencent and Antgroup, regardless of the currency’s international reception, can be more difficult than originally thought.
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