You may have heard of the digital yuan, which is a new type of electronic currency issued by China's central bank. What is the difference between it and Alipay and WeChat Pay that we usually use?And why is it a threat to a global reserve currency like the US dollar?Let's take a look.
What is the difference between digital yuan and our commonly used WeChat and Alipay?
Let's briefly introduce it from the following four aspects:
Issuer: Digital RMB is a legal tender issued by the People's Bank of China, which is a reflection of national credit and cannot be rejected by any person or institution. WeChat and Alipay are third-party payment platforms, which are the transaction channels and carriers of legal tender, and merchants can choose whether to accept them. Funds**: The digital yuan can be used directly, without the need to transfer money through a bank account, which is equivalent to cash in a mobile phone. WeChat and Alipay need to transfer funds from personal bank accounts to the corresponding payment accounts, which is equivalent to the online version of the POS machine. Privacy protection: The e-CNY adopts the principle of "small amount anonymity and large amount traceability", and merchants and third parties do not have the right to obtain consumer identity and payment data, so as to protect personal privacy. Every transaction of WeChat and Alipay will be recorded in the system of the platform or bank, and there is a risk of leakage. Payment method: The e-CNY supports dual offline payments, that is, in the absence of network and electricity, you can also pay through mobile phones or hardware wallets, improving the convenience and security of payment. WeChat, Alipay is the best payment tool, relying on the Internet connection, there is a possibility of payment failure. Judging from the feedback from the headline comments, a large number of friends still understand the digital yuan as a platform and tool like WeChat and Alipay. This is a misunderstanding and a misinterpretation of the digital yuan. The launch of the digital yuan is not intended to replace WeChat and Alipay. It is an electronic form of our traditional wallet wallet, which has the international name "e-CNY", which is the electronic version of our paper RMB. Because many friends are Xi to third-party payment platforms, they feel that the launch of digital yuan is too much, and even disgusted and ridiculed. Having such an idea is not only a superficial understanding of the digital yuan, but also ignorance, ignorance, and solidified thinking.
Advantages of the digital yuan
The digital yuan has many advantages, such as:
It is legal tender, that is, it is, like paper money, it is a state-sanctioned currency that any merchant must accept. We don't have to worry that some places don't support the digital yuan (although it is still in the pilot stage), as long as you have the digital yuan, you can spend it anytime, anywhere. It is secure because it is issued and managed directly by the central bank and will not be affected by third-party payment platforms. Don't worry about your account being stolen, or your money frozen, or your transactions being tracked, or your privacy compromised. The digital yuan belongs only to you, and we are free to use it. The four types of anonymous wallets of e-CNY can be opened and used without an ID card. It is convenient, because it does not need to bind any bank card (such as four types of anonymous wallets), we only need to scan the other party's *** or enter the other party's mobile phone number (and package number) to complete the payment or transfer. We can even use it without a network, as long as our mobile has a charge. You can also use it to withdraw cash, and there are already many regional banks that support digital yuan ATMs, which can exchange money in digital wallets for paper money. It is innovative because it makes use of blockchain technology to enable smart contracts and the functionality of web 3. These features can make our payments smarter and more flexible. 
The impact of the digital yuan
The digital yuan has a significant impact not only on China, but also on the global financial system. It could challenge the dollar's position and give us a greater say in international and diplomatic affairs. Why is that?
First, the digital yuan can make cross-border payments faster and cheaper. Now, if we want to send money to someone abroad, we need to go through some intermediary agency, such as a bank or the SWIFT system, which charges a fee and it takes a few days to complete the transfer. Moreover, these institutions are also controlled by certain Western countries, and they can impose sanctions on certain countries or regions at any time, such as North Korea, Iran, etc., which will affect the economy and finance of these countries or regions. However, if we use digital yuan, we can directly make peer-to-peer transfers with the other party, reducing intermediary institutions and reducing intermediary transaction costs, which can be completed in just a few seconds. This not only improves the efficiency of payments, but also reduces the overall cost of the transaction. The international nature of the digital yuan makes it easier to conduct cross-border transactions on a global scale. In addition, the digital yuan is also expected to reduce dependence on traditional international payment systems and reduce the impact of external factors on payment stability, thus providing an innovative possibility for the steady development of the global economic system. Overall, the promotion of e-CNY is not only of great significance in China, but also provides new prospects for achieving a more efficient and convenient cross-border payment system at the international level. Second, the digital yuan can allow more countries and regions to use the yuan. Now, many countries and regions use the U.S. dollar as a reserve currency and settlement currency, which gives the U.S. a great advantage to increase its wealth by printing money, and it can also influence the global economy and finance by controlling the currency**. However, if the digital yuan can be circulated globally, then many countries and regions will choose to use the yuan for ** and reserves, which will reduce dependence on the US dollar and increase trust and cooperation with China. At present, our country has established cross-border payment projects for digital yuan with some countries and regions. These countries and regions are important partners of China, and if they can use the digital yuan for settlement, it will improve the efficiency and security of the yuan, and will also increase the international influence of the yuan. Progress and application of the digital yuan
The promotion and application of the digital yuan has made remarkable progress across the country. As of 2023, the pilot area has been expanding, and the digital yuan has penetrated into people's daily life, realizing the change from "pilot" to "full application". In the application of the digital yuan, we can see many exciting examples.
First of all, the digital yuan has shown strong application potential in all aspects of life. From paying utility bills, mobile phone bills to paying taxes and fees, the digital yuan is slowly becoming a convenient tool for residents' lives. This wide range of living expenses makes the digital yuan play an important role in residents' daily expenses.
Secondly, the application of digital yuan in retail and online shopping is also becoming more and more abundant. From large e-commerce platforms such as JD.com, ** to physical supermarkets such as Walmart and Meiyijia, the payment methods and preferential subsidies of digital yuan are becoming one of the choices of consumers. This not only improves the convenience of payment, but also promotes the popularization of digital yuan in the business field.
In addition, public service venues such as hospitals, schools, and canteens are gradually connected to the digital yuan payment system. In some regions, units and enterprises have even paid wages through digital yuan, achieving full coverage from daily chores to work salaries. This makes the digital yuan not just a payment tool, but also a part of people's lives and work.
On the whole, the digital yuan is not only different from traditional payment tools in terms of payment methods, but also shows unique application advantages in various fields of life. Its promotion and application have not only brought profound changes to the domestic financial sector, but also pointed out an innovative path for the development of the global payment system in the future. The emergence of the digital yuan is not only an innovation of traditional payment methods, but also an active exploration of the future direction of financial development. Led by the digital yuan, we have ushered in a new era of payment methods.
We can see that the digital yuan is a great innovation, which can not only make China's financial system more advanced and convenient, but also allow China to play a greater role and position in the global financial system. The digital yuan is a financial business card of China, which demonstrates China's scientific and technological strength and national credit, and also reflects China's openness and cooperation.