China’s CBDC Efforts Struggle to Deliver, Report Questions Xi Jinping’s Influence

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As a seasoned crypto investor with years of experience navigating the complex and ever-evolving landscape of digital currencies, I must say that the recent developments surrounding China’s digital Yuan project have piqued my interest. The report by The Epoch Times certainly paints a picture of challenges faced by this ambitious initiative under President Xi Jinping’s leadership.

A more recent analysis published by The Epoch Times raises questions about the effectiveness of China’s digital yuan venture. It suggests that the project has experienced setbacks, stating that it may not be successful, and highlights difficulties encountered during its development under the leadership of President Xi Jinping.

The report underscores political advancements and what appears to be a change in China’s position regarding its Central Bank Digital Currency (CBDC). The dismissal of Yao Qian, a key figure in the digital yuan initiative, has presented a substantial hurdle. Yao was expelled from the Chinese Communist Party (CCP). He served as the inaugural director of the Digital Currency Research Institute and previously headed the Science and Technology Supervision Department of the China Securities Regulatory Commission. Allegations against him involve clandestine contracts with tech firms and accepting bribes.

As a crypto investor, I’ve been closely following the developments of the digital Yuan project. Recently, The Epoch Times suggested that unseen forces might be hindering its progress. They further argued that Yao’s departure signifies a more substantial government resistance against the project’s continuation. Since Yao started working on this project in 2014, his exit is seen as a major setback for the initiative, potentially indicating a challenging road ahead for the digital Yuan.

Slow Adoption and Declining Enthusiasm

Initially, Xi Jinping positioned the digital yuan as a crucial part of China’s economic and technological ambitions; however, it has faced difficulties in gaining widespread approval. An article published by The Paper, a government-controlled outlet, voiced doubts about the project’s success in 2022, claiming that even after four years of promotion, very few people had adopted the currency. Moreover, a survey on social media platform X found that 90% of participants had neither encountered nor used the digital yuan. At an individual usage level, China’s economy is almost cashless today, with the WeChat app being widely used on Chinese phones and serving as the primary method for day-to-day transactions nationwide.

In China, where WeChat is ubiquitous among users, many Chinese consumers remain unacquainted with the concept of a digital currency.

2023 saw a decrease in enthusiasm towards Central Bank Digital Currencies (CBDC) accompanied by a significant reduction in updates and advancements. According to The Epoch Times, Beijing’s perspective on the digital Yuan has shifted from viewing it as a revolutionary tool for everyday transactions to just an additional option within the current payment system.

In spite of obstacles, local-scale endeavors to foster the digital yuan persist. Notably, the Shanghai Municipal Government has recently proposed fresh adoption strategies, and Fuzhou city has disclosed plans to incorporate the digital yuan into project funding. These actions indicate that certain regional administrations are determined to progress the CBDC (Central Bank Digital Currency).

On the world stage, the growth of BRICS could offer a significant opportunity for the digital Yuan. At a recent gathering in Kazan, Russia, BRICS leaders discussed exploring shared Central Bank Digital Currency (CBDC) systems for cross-border transactions. A writer for China Daily suggests that BRICS could help globalize the digital Yuan alongside initiatives like the Regional Comprehensive Economic Partnership and the Belt and Road. The financial impact of Hong Kong is also viewed as crucial in this endeavor.

The firing of Yao Qian and slower adoption of the digital yuan has sparked doubts about the future direction of China’s central bank digital currency (CBDC) project. Yet, Beijing’s collaborations within BRICS and regional endeavors could potentially offer paths for rejuvenating this initiative. As China navigates both domestic difficulties and international aspirations, the course of the digital yuan remains unclear but definitely not yet written off as a failure.

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2024-11-26 15:33