How China's Digital Yuan Can Really Challenge The Dollar

 

China appears to be the first out of the gate in the quest for digital currency. PBOC has become the first and the major central bank to run large-scale trials of digital currency or electronic payment (DCEP). Through this, they are focusing to improve the efficiency of the transaction system. It would be easy enough to keep a check and storing data in a very proper way.

These all can help the government to fight against frauds, tax evasion, and money laundering and along with it promote financial inclusion. So let’s get started with the topic that how Yuan Pay Group can affect China’s digital currency and also challenge other currencies.  

 

Two tired structure 

 

Using two tired structures, the PBOC will be going to issue DCEPs- same as the physical Yuan and consider it as legal tender. These will be shared or made to start within the people when the commercial banks got satisfied by the KYC of their client. The intermediates didn’t have any place here in the digital transaction (digital currency or electronic payment). Every payment done is encrypted end to end, from the sender to the receiver hence saving time and extra middle man charges too.

 These digital payments are repeatedly operated internally with existing digital payment mechanisms such as Alipay and WeChat Pay. The technical team is also working on making payments more advanced, without internet or telephonic connections. To get your device connected with the small field or near field connections and as a result, get your payment with one device to another. 

 

Efficient Cross-border payments

 

Certainly, electronic payments can reduce costs and helps in improving the efficiency of cross-border payments. With the help of RMB, which are processed through China’s CIPS largely and to a broader extent. In 2015 CIPS was launched in order to facilitate onshore clearing of RMB international transactions, which processes 137 billion Yuan ($19.4 billion) in a single day. It involves 1,023 participants in 96 countries comparable with $5-6 trillion worth per day through SWIFT. Many countries are participating in China’s BRI. These countries will get benefits from the new digital or electronic payment options that are going to be initiated in China. So by this, it is possible that Yuan can bring all other currencies beneath it. If more countries start emerging with China’s new DCEP system, then it's possible that all other E- payment options are going to face a disastrous downfall. 

 

Conclusion 

 

In short, we can say that the new E-payment system introduced by China- DCEP is going to be a broadly used network in almost every country in the world. It will improve the efficiency of the RMB in international payments, and hence getting the Chinese economy on top and biggest in the world. The more unique ideas are implemented the more chances exists for making it the biggest running system in the world. Hence it would be adopted all over the world. The Digital Yuan is going to be on top with the implementation of the new DCEP system pushing out all other older systems. Get connected with us.