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Editor’s note: Matteo Giovannini is a financial professional at ICBC in Beijing and a member of the China Task Force at the Italian Ministry of Economic Development. The article reflects the views of the author and not necessarily the views of CGTN.
The technological disruption that the financial sector is experiencing this year as a result of the coronavirus outbreak goes beyond the limits of imagination, revolutionizing an industry that has not changed for decades and affecting the way people interact with financial services from payments and transactions up to loans. .
One of the most fascinating aspects of innovation is represented by the decisions around the introduction of sovereign digital currencies of countries, which are expected to replace paper money, the main means of exchange between different civilizations in the not too distant future. for centuries, by pixels. on the screen of a smartphone forever changing the entire global financial industry.
Sina Finance has reported that the city of Shenzhen, in southeast China, in collaboration with the People’s Bank of China (PBOC), plans to launch a pilot program for the promotion of the digital Chinese yuan through a public giveaway that distributes 50,000 packages Digital reds of the value of 200 yuan each through a lottery worth 10 million yuan ($ 1.5 million).
Prize winners will be able to use the money at more than 3,000 designated stores over a seven-day period, in a shopping spree that will fuel the growing demand for the digital yuan while accelerating the transition to a cashless society by the end of this year.
The announcement comes just days after another move aimed at consumers, with PBOC’s decision to test for the country’s digital yuan through Japanese vending machines that represent an ideal platform for testing characterized by frequent use of small Payments.
The public draw for digital red packets represents a step forward in the attempt to promote the use of the virtual yuan, as it aims to give citizens the opportunity to get used to the next digital revolution by opening an electronic wallet through the Digital application. Renminbi in to be able to claim the funds received through the lottery. In this way, people will become eligible for the role of pioneers in the use of what will become the future medium of exchange.
The move shows China’s ability to develop long-term strategic plans, considering that the country has been working on the launch of a virtual currency since 2014, and as a demonstration of commitment to ensuring that the deployment is characterized by security and safety. operability. efficiency in transactions and creating a powerful tool for financial inclusion.
In this specific case, China’s reputation for long-term planning is mixed with a short-term need to introduce an innovative currency that can assist the country in the ongoing transition from a world dominated primarily by the US dollar to the rise of a multi-currency coin. world that will affect the markets and almost all asset classes.
It is also relevant to note that from a geographic perspective, China’s decision to pilot in Shenzhen, a thriving technology hub and mature market environment, gives the city a key role as a benchmark for change for the rest of the country. and in a leadership position in promoting stronger financial integration within the Bay Area.
Also, an interesting aspect to consider in the Shenzhen lottery scheme is that China has a clear roadmap in mind to implement the distribution of the digital currency, starting with a local implementation that will eventually lead to the ultimate goal of internationalization. the yuan. .
At a time when central banks in advanced economies such as the Federal Reserve, the European Central Bank, and the Bank of England are still in an early stage of discussing how to develop their own virtual money, and when the Bank of Japan has announced its plan to begin testing on the digital yen no later than next year, China shows that it is in a leading position in the race for innovation and that the long-awaited widespread rollout of its sovereign digital currency is fast approaching.
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