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UncategorizedThe arrival of the 'Digital Yuan' and its effect on the universal...

The arrival of the ‘Digital Yuan’ and its effect on the universal monetary system

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China’s finances are undergoing significant changes right now—a scale that international and world powers must keep an eye on because it is said that this is going to affect the global economic momentum. China is experimenting with people. Two hundred million yuan of ‘Digital Yuan’ in the country’s four major cities: Shenzhen, Suzhou, Song’an and Chengdu, and large private stores. Whether it’s Starbucks or McDonald’s, some cities have trials to pay half of the civil servants’ salaries in digital yuan. It also had begun international trials. The digital yuan is a digital currency, or Digital Currency Electronic Payment (DCEP). According to bitcoin revolution trading bot, The People’s Bank of China began to develop in 2014 and produces payments via blockchain and online to support an entirely cashless society.

Photo by pixabay on pexels
Photo by pixabay on pexels

There is a vast difference between digital yuan and mobile banking. Because in the past, more than 500 million people in China used their mobile phones to pay mainly through Alipay or WeChat Pay, which is a significant private sector that has built a foundation for a cashless society in China. Aren’t half of the Chinese people using QR codes for daily spending? Of course, Chinese online spending was still a way for people to deposit their coins or paper into the bank in the past. And transfer money from bank to online wallet to spend, But the digital yuan has evolved from paper to digital currency. —that is, it will be online forever.

The valuation of digital yuan

The paper and digital yuan values are 1:1, where the digital yuan circulates in the blockchain system. But blockchain development makes the digital yuan ‘different’ because the blockchain has a decentralized transaction model. Every transaction is recorded as computer code. For editing any transaction, it must be edited in massive copies. It makes corruption or money laundering very difficult. The Chinese authorities have planned that in the future, Chinese finance will use 100% digital yuan.

The main thing is that the Chinese authorities will track who the money comes in and who goes out. It is traceable for every transaction. Therefore, the Chinese government intends that the digital yuan will solve the problems of corruption, taxes, money laundering and the black market. Because all money is in the same system, No money was taken to dig jars and bury the ground in any way.

Any state or bank does not regulate the Digital yuan because digital yuan is regulated and produced by the central bank and the Chinese government. There is a law to support the payment of debts. The valuation is also based on the gold price. It is not a shared value provided by investors like Bitcoin.

Will digital yuan change the world?

Now, how will the digital yuan change the world? First of all, it’s about becoming a global currency. At present, the main currency in the world is the US dollar. As a result, most use US dollars when we send money internationally or conduct international transactions.

But digital yuan is a new technology. It is new finance that has been legalized. It is said to be the first digital currency to replace traditional money. (For example, legal bitcoins worldwide are not supported for payment. Because there is a function of speculation more), here we may see that China’s ‘partner countries will also be forced to use digital yuan for cross-border payments. And with the technology that makes payments ‘convenient, fast, secure, and low-cost’, the digital yuan may become a virtual global currency like the US dollar. In the future (shortly)

Many Thai businesses are done with China, whether importing or exporting. However, they would not avoid this change, ‘Manop Sangiambut’, senior deputy manager Chief Executive Officer Financial Group and former Deputy General Manager Head of China Business Division, Siam Commercial Bank, once commented on the digital yuan. He thinks that the digital yuan’s mobility will make it a virtual currency in the future. But in the short term, he does not think the digital yuan will directly impact the Thai business sector.

But in the long run, Thai businesses should keep an eye on whether the digital yuan’s mobility will play a part in driving the yuan’s internationalization. including increasing the weight of the yuan in foreign reserves of various countries, which has a continuous effect on the exchange rate

It was in May last year. The latest move on the digital yuan follows a year-long trial in China, where the Hong Kong Monetary Authority (HKMA) has been testing the cryptocurrency. and testing cross-border delivery with the People’s Bank of China and prepare to expand the test to be wider

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