- Chinese workers are reportedly converting their salaries paid in digital yuan (e-CNY) into fiat currency immediately after payment, indicating a preference for physical cash over the country’s central bank digital currency (CBDC).
- Concerns about the lack of utility and privacy issues have been cited as reasons for the slow uptake of the digital yuan.
- Despite these concerns, the former governor of the People’s Bank of China reported that over $250 billion in transactions were processed using the digital yuan as of mid-2023.
Chinese workers show a preference for fiat currency over the digital yuan, raising concerns about the adoption of the country’s CBDC. Despite these concerns, the digital yuan has processed over $250 billion in transactions as of mid-2023.
Chinese Workers Show Preference for Cash Over CBDC
According to a report from the South China Morning Post, many Chinese workers who receive their salaries in digital yuan are converting it into fiat currency immediately after payment. This behavior indicates a clear preference for physical cash over the digital alternative, despite the Chinese government’s efforts to promote the adoption of the digital yuan.
Concerns About Utility and Privacy
The report surveyed local workers and found that concerns about the lack of utility and privacy issues are among the reasons for the slow uptake of the digital yuan. Ye Dongyan, a researcher at the Cheung Kong Graduate School of Business in Beijing, highlighted the need to balance privacy and security, which has slowed the promotion of the digital yuan. Unlike traditional cash, which allows for anonymous transactions, the digital yuan is traceable, giving the government a high level of visibility into individuals’ financial activities.
Over $250 Billion in Transactions Processed
Despite these concerns, Yi Gang, the former governor of the People’s Bank of China, reported that over $250 billion in transactions were processed using the digital yuan as of mid-2023. However, he acknowledged that privacy remains a major issue. The Industrial and Commercial Bank of China also revealed that over 15 million e-CNY wallets were newly created by individuals in 2023, with an additional creation of 1.3 million wallets by business entities.
Conclusion
While the adoption of the digital yuan among Chinese workers appears to be slow due to concerns about utility and privacy, the digital currency has seen significant use in terms of transaction volume. As the country continues to promote the digital yuan, it remains to be seen how these concerns will be addressed and how they will impact the future adoption of the CBDC.
