In a world where the use of digital currencies is becoming increasingly popular, China is trying to become a leader by actively introducing the digital yuan. However, citizens are in no hurry to use the currency. Why is this happening? Let’s take a closer look at it.
Chinese Workers Prefer Fiat Money
The Chinese government is actively trying to introduce a digital yuan. According to the South China Morning Post, some Chinese cities have started paying CBDC to the country’s civil servants. However, a large number of employees are still hesitant to use them for daily transactions and convert them directly into cash.
Sammy Lin, a customer service manager at a Chinese state-owned bank in Suzhou, explains that she does not keep funds in the e-CNY app because it does not charge interest for storage. She also notes that there are currently not many places online or offline where you can use the digital yuan.
Although China has been a “functionally cashless” society for more than a decade, many citizens are still hesitant to use a purely digital currency due to concerns about traceability and limited use cases.
But despite such concerns, according to Yi Gang, former governor of the People’s Bank of China, more than $250 million worth of transactions were made using the digital yuan in July 2023. He also emphasized that the digital yuan is able to “fully protect privacy” due to the so-called “controlled anonymity,” which means that there is no tracking of small payments, but some tracking of large payments is possible.
Charles Hoskinson, the founder of Cardano, emphasizes the importance of cryptocurrency in the modern world. On May 11, he reminded on his social media page that the fundamental concept of cryptocurrency is the creation of new social contracts. Hoskinson emphasized that it is these contracts that will make the government accountable to the people and urged the industry to focus on promoting this goal.
He also warned that anyone who opposes the spread of cryptocurrencies unknowingly supports the concentration of power in the hands of a few.
“Crypto gives us our voices, financial freedom, and shared humanity back.” Hoskinson remarked.
European Crypto Industry Development
The crypto industry is gaining significant growth in Europe. European countries are actively working to create a legal environment to ensure investor protection and financial system stability. For example, Switzerland is known for its “crypto valley” in Zurich, where numerous blockchain companies and startups are based. Malta has adopted a number of laws aimed at regulating cryptocurrencies and ensuring their legality and transparency.
European countries are constantly working on the development of new blockchain solutions and cryptocurrency payment systems. European countries are also actively exploring the possibilities of integrating cryptocurrencies into their financial systems. For example, Switzerland was one of the first countries to introduce the possibility of paying taxes in Bitcoin.
Many countries have long accepted cryptocurrency as a means of payment, and Ukraine is no exception. Ukraine is intensively expanding the crypto sphere, attracting investors, startups, and regulators to create a favorable landscape for this spectrum.
Ukrainians have long had the opportunity to pay for purchases in grocery stores using payment solutions from Corefy, Switchere, Whitepay, and many others. Moreover, the first cryptocurrency transaction for the purchase of an electric car has recently taken place in Ukraine. This step demonstrates the significant development and potential of the industry.
Summary
The introduction of the digital yuan in China faces a number of challenges, but despite the difficulties, the government continues to promote this initiative. At the same time, the development of the crypto industry in Europe is showing remarkable progress, creating new opportunities for businesses and citizens. The involvement of cryptocurrencies in everyday financial transactions, including charity and shopping, demonstrates the importance of digital assets for economic development. As Charles Hoskinson has aptly noted, the rise of cryptocurrencies is not only shifting financial paradigms, but also has the potential to redefine social contracts and empower people in unprecedented ways.