Digital yuan being dumped in favor of cash

While
Beijing
is
trying
to
popularize
its
digital
yuan,
only
a
few
seem
to
be
ready
to
use
it.

As
Chinese
government
employees,
especially
those
in
state-owned
enterprises
and
governmental
organizations,
become
early
adopters
of
receiving
their
salaries
in

digital
yuan,
a
divide
emerges
in
their
perceptions
of
the
currency
despite
Beijing’s
efforts
to
promote
its
use.

Sammy
Lin,
an
account
manager
at
a
state-owned
bank
in
Suzhou,
told
the
South
China
Morning
Post
in
an

interview
that
although
she
receives
her
salary
in
digital
yuan
through
the
e-CNY
app,
she,
like
many
others,
prefers
not
to
keep
her
money
in
the
app
due
to
concerns
over
the
absence
of
interest
and
limited
usability.

“I
prefer
not
to
keep
the
money
in
the
e-CNY
app,
because
there’s
no
interest
if
I
leave
it
there.”

Sammy
Lin

The
report
notes
that
the
digital
yuan’s
traceable
nature
raises
worries
about
personal
financial
data
being
exposed,
prompting
some
to
convert
the
digital
currency
into
cash
instead.

Addressing
these
concerns,
Ye
Dongyan,
a
researcher
at
the
Cheung
Kong
Graduate
School
of
Business
in
Beijing,
said
Beijing
should
achieve
a
delicate
balance
between
privacy
and
security
in
the
promotion
of
the
digital
yuan.

“Paper
currency
is
used
anonymously,
but
the
digital
yuan
is
different.
The
boundaries
between
information
tracking
and
information
security
protection
need
more
deliberation.”

Ye
Dongyan

While
the
currency
offers
controllable
anonymity
for
smaller
transactions,
larger
transactions
require
identification
to
prevent
illicit
activities
such
as
money
laundering.

Despite
government
assurances
about
the
high
level
of
privacy
protection,
some
still
remain
skeptical.
Albert
Wang,
a
municipal
government
employee
in
Suzhou,
notes
the
limitations
of
the
digital
yuan
compared
to
established
online
payment
platforms
like
Alipay
and
WeChat
Pay,
saying
his
wife
“withdraws
it
[digital
yuan]
upon
receipt
because
she
can’t
deposit
the
money
or
buy
financial
products
with
the
e-CNY
wallet.”

China’s
digital
yuan
has
been
a
front-runner
in
the
sphere
of
central
bank
digital
currencies,
especially
among
major
economies.
With
a transaction
volume hitting
1.8
trillion
yuan
(approximately
$250
billion),
its
adoption
and
development
seem
to
be
triggering
other
economies
to
dive
into
the
digitization
race.

Global
banking
institutions
have
had
limited
involvement
in
the
digital
yuan
ecosystem
to
date,
but
Beijing
seems
focused
on
gradual
expansion.
In
2023,
French
bank
BNP
Paribas
began
integrating
the
digital
yuan
into
its
services,
connecting
corporate
clients’
wallets
to
their
bank
accounts.
Later
on,
multinational
banking
giant
Standard
Chartered

also
began
offering
exchange
services
for
the
digital
yuan.