{"id":3910,"date":"2020-04-28T17:50:28","date_gmt":"2020-04-28T17:50:28","guid":{"rendered":"https:\/\/atozcrypto.org\/?p=3910"},"modified":"2020-04-28T17:50:28","modified_gmt":"2020-04-28T17:50:28","slug":"china-takes-steps-to-become-first-cashless-society-after-covid-19","status":"publish","type":"post","link":"https:\/\/atozcrypto.org\/china-takes-steps-to-become-first-cashless-society-after-covid-19\/","title":{"rendered":"China takes steps to become first cashless society after Covid-19"},"content":{"rendered":"<p>As contactless payments become the norm amid the worldwide pandemic response, China rolled out its digital currency this month in four cities, setting it up to become the world\u2019s first cashless society.<\/p>\n<p>The digital yuan is a public-private initiative, being tested in Shenzhen, Suzhou, Xiongan and Chengdu by franchisees like McDonald&#8217;s and Starbucks, and other local businesses. It is a \u201cgame-changer\u201d in financial services, Nameer Khan, chairman of the Mena FinTech Association, told\u00a0<em>The National<\/em>, for a country that badly needs a break.<\/p>\n<p style=\"text-align: center;\"><iframe style=\"width: 120px; height: 240px;\" src=\"\/\/ws-eu.amazon-adsystem.com\/widgets\/q?ServiceVersion=20070822&amp;OneJS=1&amp;Operation=GetAdHtml&amp;MarketPlace=GB&amp;source=ss&amp;ref=as_ss_li_til&amp;ad_type=product_link&amp;tracking_id=atozcryptosto-21&amp;language=en_GB&amp;marketplace=amazon&amp;region=GB&amp;placement=B07MBH6BPW&amp;asins=B07MBH6BPW&amp;linkId=1c3470e1b7921174d65c0314e5b7a7e6&amp;show_border=true&amp;link_opens_in_new_window=true\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>After four decades of growth, China&#8217;s economy shrunk in the latest quarter due to the impact of the coronavirus epidemic. Since January, China has recorded more than 83,000 cases of Covid-19 and at least 4,500 deaths, mostly around the city of Wuhan, in central Hubei province, where the outbreak first started. With the pandemic still being felt across the world, officials believe the worst appears to be over in China, and measures are being rolled out to revive the world&#8217;s second-biggest economy.<\/p>\n<p>Chinese people are no stranger to paying for goods and services through their smartphone. Local tech giants Alibaba and Tencent pioneered digital merchant payments around 2014, leading a transition away from cash, where they now account for 90 per cent of the $17 trillion (Dh62tn) mobile payments market, according to CGAP, a financial inclusion think tank in Washington DC.<\/p>\n<p>The companies, as well as the Chinese government, see digital payments \u201cnot as a goal in itself but as an entry point to a vast ecosystem of both offline and online goods and services \u2013 and they are using the data generated to transform financial services as well as the physical retail industry\u201d, CGAP found. Mass uptake is enabled by the country\u2019s widespread bank account and smartphone ownership.<\/p>\n<div id=\"insertMPUBefore\"><\/div>\n<p>But such transactions have always relied on a cash-based system. The digital yuan is a currency that behaves much like normal cash, but exists only as code in a digital wallet, backed by the People\u2019s Bank of China. A cryptocurrency, by contrast, is decentralised by design.<\/p>\n<p>Franchisees of Starbucks, McDonald\u2019s and Subway chains in China are on the list of firms that will test the national digital currency in the near future, the\u00a0<em>South China Morning Post<\/em>\u00a0reported, along with locally-owned businesses like hotels, bakeries and gyms.<\/p>\n<p>Several years ago, China banned initial coin offerings and made it difficult for cryptocurrencies to find a foothold in the country, while simultaneously issuing research papers at regular intervals about developing its own digital currency.<\/p>\n<p>\u201cThe digital RMB (remninbi, or yuan) is a natural evolution from digital payments,\u201d Ling Zhang, a vice president at Binance, told\u00a0<em>The National<\/em>. \u201cNo-one imagined how universal digital payments would be [from Tencent and Alibaba] five years ago. But it is a step-by-step understanding\u201d and now consumers are ready for a digital currency, she said.<\/p>\n<p><img decoding=\"async\" class=\"size-medium wp-image-3911 aligncenter\" src=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/bz27-APR-china-mobile-payments-300x230.jpg\" alt=\"\" width=\"300\" height=\"230\" srcset=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/bz27-APR-china-mobile-payments-300x230.jpg 300w, https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/bz27-APR-china-mobile-payments-768x589.jpg 768w, https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/bz27-APR-china-mobile-payments-850x652.jpg 850w, https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/bz27-APR-china-mobile-payments.jpg 1024w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>Covid-19, if anything, has been a \u201ccatalytic event\u201d for cashless payments, which can rely on a digital currency.<\/p>\n<p>With fears of the virus spreading via bank notes, \u201cthe normal way I used to interact with people for the exchange of services or goods is not working anymore\u201d, Gaurav Dhar, chief executive of payment technology company Marshal, told\u00a0<em>The National<\/em>. Consumers will be forced to change their habits, he said, and he predicted that they will.<\/p>\n<p>Last month, the UAE Central Bank encouraged the use of online and digital services \u201cas a measure to protect the health and safety of UAE residents\u201d, increasing the maximum payment limit for contactless bank cards.<\/p>\n<p>It also directed banks to replenish ATMs with new banknotes to prevent the spread of the virus.<\/p>\n<p>Cash has a few other problems that digital currencies address, according to FinTech advocates. The average life of a $10 bill is 4.2 years and studies have found between 53 per cent and 100 per cent of local currency are contaminated, according to Mr Khan, of the Mena FinTech Association.<\/p>\n<p><a href=\"https:\/\/amzn.to\/2VLQnsS\"><img decoding=\"async\" class=\"aligncenter wp-image-3913 size-medium\" src=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner-300x269.png\" alt=\"\" width=\"300\" height=\"269\" srcset=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner-300x269.png 300w, https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner.png 400w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>The US Federal Reserve reports that the cost of printing a $1 bill is 5.5 cents while the cost of printing a $5 bill is 11 cents.<\/p>\n<p>\u201cOne study estimated that in 2018 alone, the global cost of printing paper currency was $35.3 billion. This, by the way, does not include the cost of distributing, collecting, destroying the paper currency and counterfeiting of currency notes,\u201d Mr Khan said.<\/p>\n<p>Nationalised digital money can also counter new digital currencies, therefore protecting a country&#8217;s sovereignty, he added.<\/p>\n<p>Indeed, the digital yuan is understood to be as much about consumer spending domestically as it is about China\u2019s global trade ambitions.<\/p>\n<p>Jason Wu, chief executive of digital savings company DeFiner, said its digital currency will allow China to \u201csidestep\u201d a US-dominated financial system and a reliance on the US dollar. It may set China up to become the leader in a globalised digital economy for transactions.<\/p>\n<p>But beware, he added, of growing competition among major economies to roll out similar digital currency products.<\/p>\n<p>Facebook\u2019s Libra, for example, is \u201ca very similar move\u201d, Mr Wu told\u00a0<em>The National<\/em>, and he predicted the digital token, backed by a basket of currencies, may gain traction with US legislators as the economy struggles amid the pandemic.<\/p>\n<p>Recently, a lone senator in Congress, Sherrod Brown, has advocated for a digital dollar wallet to be incorporated in consumer stimulus packages amid Covid-19.<\/p>\n<p>Mr Brown\u2019s pitch for a \u2018FedAccount\u2019 would be a free bank account to receive money, make payments and take out cash through member banks and post offices, according to the bill proposal.<\/p>\n<p>Analysts have said it is an idea taken right out of Mark Zuckerberg\u2019s playbook. But it actually looks a bit more like China\u2019s current stimulus plan.<\/p>\n<p>Since last month, digital coupons have been loaded up on Chinese smartphones to encourage spending in restaurants and grocery stores by local government leaders. In Wuhan, for example, about $10 per citizen has been distributed via point-of-purchase apps like WeChat and Alipay.<\/p>\n<p>\u201cDigital coupons allow the Chinese government to trace the usage of these coupons,\u201d Dr Shirley Yu, an expert on China\u2019s economy and visiting fellow at the London School of Economics, told\u00a0<em>The National<\/em>. She noted that cash, as distributed by the US government recently, \u201cdoes not allow traceability\u201d.<\/p>\n<p>Coupons, by comparison, &#8220;allow the government to know which sector is most helped, who uses it and where money is actually spent\u201d.<\/p>\n<p>\u201cOut of this crisis we see technology used in China not only in the containment of the epidemic, but also economic rescue. It speeds relief aid and increases efficiency thus enabling a government to more quickly distribute funds to its citizens,&#8221; she said.<\/p>\n<p>So far, 20 countries are officially working on central bank-backed digital currency projects around the world, adding to a growing sense of an emerging competition. China is at the head of the pack.<\/p>\n<div class=\"align-left\">\n<p class=\"last-updated wv-ignore\">Updated: April 27, 2020 08:15 AM<\/p>\n<p>First published on https:\/\/www.thenational.ae\/business\/banking\/china-takes-steps-to-become-first-cashless-society-after-covid-19-1.1011042<\/p>\n<p><a href=\"https:\/\/amzn.to\/2VLQnsS\"><img decoding=\"async\" class=\"aligncenter wp-image-3913 size-medium\" src=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner-300x269.png\" alt=\"\" width=\"300\" height=\"269\" srcset=\"https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner-300x269.png 300w, https:\/\/atozcrypto.org\/wp-content\/uploads\/2020\/04\/ledgernanos-banner.png 400w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>As contactless payments become the norm amid the worldwide pandemic response, China rolled out its digital currency this month in four cities, setting it up to become the world\u2019s first cashless society. The digital yuan is a public-private initiative, being tested in Shenzhen, Suzhou, Xiongan and Chengdu by franchisees like McDonald&#8217;s and Starbucks, and other &hellip;<\/p>\n","protected":false},"author":1,"featured_media":3912,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pgc_meta":"","_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[15],"tags":[],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>China takes steps to become first cashless society after Covid-19 - AtoZcrypto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/atozcrypto.org\/china-takes-steps-to-become-first-cashless-society-after-covid-19\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China takes steps to become first cashless society after Covid-19 - AtoZcrypto\" \/>\n<meta property=\"og:description\" content=\"As contactless payments become the norm amid the worldwide pandemic response, China rolled out its digital currency this month in four cities, setting it up to become the world\u2019s first cashless society. 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