As the digital yuan, China’s CBDC, experiences technological advancements and shifts in its business strategy, there’s an increasing demand for wallet providers to support these digital payments across all retail platforms.
The Call for Updated Payment Tools Supporting The Digital Yuan
On September 3, Changchun Mu, the esteemed director of the Digital Currency Research Institute at the People’s Bank of China, emphasized the importance of evolving payment methodologies in a notable address at the China International Service Trade Fair. He revealed that the digital yuan has undergone substantial changes, not only in its core framework but also in its operational model. Consequently, the spotlight now is on the progression of payment instruments to match this digital growth.
Highlighting the significance of established commercial banking applications, such as WeChat and Alipay, Mu reminded these giants of their responsibility to align with governing regulations. For the immediate future, Mu suggested that these platforms can introduce QR code features for the CBDC. Nevertheless, the long-term vision involves extensive enhancements to their payment functionalities.
Wholesale Payments and The CBDC
Mu’s address also touched upon the intricacies of wholesale payments. Contrary to the potential assumptions, there’s no immediate necessity to overhaul the existing interbank payment and clearing systems. Instead, a simple incorporation of the CBDC payment mechanism would suffice. Yet, the specifics of such an integration remained untouched in his discourse.
China’s dedication to creating a blockchain-driven yet entirely regulated digital landscape persists. This commitment was further demonstrated in August when Chinese authorities announced the inception of the Hangzhou Data Exchange. Powered by blockchain, this innovative venture aims to optimize the transfer and processing of corporate IT data by utilizing distributed ledger technology.
China stands at the forefront as the digital landscape continues its swift evolution. The nation ensures its CBDC and associated payment systems evolve and set future benchmarks.
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