How Chinese Investors Convert Digital Yuan into Cash: CBDC Currency Popularity Report
Chinese Investors Exchange Digital CBDC Yuan for Physical Cash
Chinese investors are increasingly exchanging digital CBDC yuan for traditional, physical cash. Reports indicate that employees receiving wages in the form of digital yuan rarely use them, preferring to exchange them for cash instead.
Lack of Practicality of Digital Currency and Surveillance Concerns
Many Chinese cities pay their state employees in digital yuan, but the majority of them immediately convert it into cash. There is concern that the lack of practicality of digital yuan and worries about surveillance make people prefer using the traditional form of payment.
Transactions Worth Over 250 Billion Dollars
Despite skepticism and concerns, since the introduction of digital yuan in 2020, transactions worth over 250 billion dollars have been conducted by July 2023. This is a significant amount, even though many people still prefer cash.
The Need to Find a Balance Between Privacy and Security
There is an urgent need to find a better balance between protecting privacy and ensuring security for the digital yuan in China. Currently, surveillance concerns and limited capabilities translate into low popularity of this form of currency.
Lack of Full Privacy Protection for Digital Yuans
Digital yuans still do not provide full privacy protection as the Chinese government monitors large payments made using them. This makes many people reluctant to use this form of payment.
Initiatives Promoting Adoption of Digital Yuans
To encourage the use of digital yuans, many Chinese cities are implementing incentive programs in the form of consumption subsidies or grants. The total amount of these initiatives exceeds 180 million Chinese yuan (approximately 26.5 million dollars).
Facing the growing popularity of cryptocurrencies and digital payment methods, China is striving to keep up with trends by promoting its own digital currency. However, further work is needed to balance security and privacy aspects for digital yuans to gain greater societal trust.
