Recently launched Chinese virtual currency has ‘counterfeit’

“We have found counterfeit digital yuan wallets in the market. Just like in the paper money era, the central bank has a duty to fight counterfeiting,” Mu Changchun, the head of China’s central bank’s digital currency research institute, said at a financial forum in Shanghai on October 25.

This statement by Mr. Mu also provides an important reminder of the difference between cryptocurrencies and China’s digital yuan. Cryptocurrency related transactions like bitcoin do not need to be verified by centralized intermediaries like banks because all transactions are stored irrevocably on a blockchain or a digital ledger, provides a decentralized solution to prevent fraud. The new Chinese digital currency is backed by the country’s central bank and all transactions must be verified by it.

The Chinese government, like elsewhere, has long waged war against counterfeiters. Earlier this year, police in this country seized 422 million yuan ($ 59.5 million) in counterfeit money, the largest amount ever seized in one go. Apparently, that war will continue with the digital yuan, which is not yet deployed nationwide.

Essentially, Chinese policymakers expect the virtual currency to provide a deeper insight into consumer spending and more direct control over the money supply. China also hopes it can improve the use of currency globally.

China recently conducted the largest-ever trial of the digital yuan in Shenzhen, a tech hub region in the south, by donating 50,000 select people. randomize this virtual currency to use.

A Shenzhen woman, who declined to give her name, said she made her first digital payment at a restaurant and saw the process go well.

“It’s as fast as when I use Alipay”, she said and compared it to one of China’s two largest mobile payment apps, with Tencent’s WeChat Pay, the other.

But despite the positive feedback from users about the digital currency, Mr. Mu stressed that Beijing will not use strong administrative measures to promote its use, but will adopt a follow-up approach market orientation.

“How many digital yuan do citizens need, we will issue the corresponding amount. As long as people need the paper yuan, we will continue to issue. me both will last for a very long time “, This expert shares.

Mr. Mu also clarified rumors that digital currencies cannot be used to buy gold or exchange foreign currencies, saying that the currency is on par with paper money and can be used to buy anything. Banknote version possible.

A key question surrounding the digital yuan is its potential impact on Alipay and WeChat Pay, which are likely to lose users to government digital wallets. Mr. Mu acknowledged the public’s keen interest in the matter and said there is no direct competition between the two currencies and the digital yuan.

“The digital yuan acts as a pure currency, while the mobile payment giants mainly provide the infrastructure, i.e. their ‘wallet’ to house the yuan. digital currency … Users can continue to use two mobile payment tools after the digital yuan is accepted, “ Mr. Mu said.

Refer QZ

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