The People’s Bank of China is watching the rise of stablecoins and seeing parallels to the popularity of mobile payments apps like Alipay - which boasts 676 million monthly active users.īoth involve using a digital representation of money that’s stored in a commercial bank account. Stablecoins are digitized money tied to fiat currency. But at the same time, relying on intermediaries like digital wallets means that control of cash - and the economy - is now in the hands of big tech.Īs a result, People’s Bank of China officials are more concerned about stablecoins than bitcoin. China’s central bank knows that cash usage is declining because physical cash is bulky and not as convenient as digital payment via a mobile phone. In addition, cryptocurrencies are mostly speculative instruments, and therefore pose potential risks to financial security and social stability,” the report read. In fact, if anything, the opposite: “Given their lack of intrinsic value, acute price fluctuations, low trading efficiencies and huge energy consumption, they can hardly serve as currencies used in daily economic activities. Since China’s eCNY was thrust into the spotlight in 2019, a lot has been said about the project with some calling it “China’s bitcoin”.Īlthough bitcoin is mentioned in the report, as a prelude when introducing the current era of digital payments, there’s no correlation between the two in the report. Interoperability with current digital payment systems, a domestic retail focus, and co-existence with physical cash are some of the key themes of China’s Central Bank Digital Currency, the eCNY, according to a new white paper released by the People’s Bank of China.
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