China is pushing its economy towards digitalization where China wants to decrease the use of paper money in domestic markets and people to use digital Yuan instead of Fiat money. The digital Yuan can be used for domestic payments like shopping, food, grocery, and bank transfers. It can be used as Fiat money but in a digital form. The reason behind the creation of the digital Yuan is that China wants to compete with trending cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Dogecoin. Therefore, China has banned using cryptocurrency in its domestic markets for investment or trading purposes. As a result, the people of China cannot use cryptocurrencies for other purposes.
Many Chinese industries will use digital Yuan, and the most profitable industries are small-scale industries that have to bear the enormous cost of transferring funds from one nation to another. The digital Yuan will make transactions cost-efficient, faster, secure, speedy, and trustworthy between two parties. As the digital Yuan has the presence of the government, or we can say the currency launched by China is centralized in a digital format, these are the reason many industries are integrating digital Yuan in payment transfers.
Industries integrating digitally Yuan are as follows: –
Digitally, Yuan boosts consumers, tech, and gaming: –
The launch of the digital Yuan is threatening other financial Sectors. Adopting digital Yuan by many companies or industries can have several benefits, like the flow of funds can be easily monitored. Government can have the actual data of every citizen of China who is using digital Yuan to make payments and investments. It is correct to say that property speculation can be made easy with the use of digital Yuan for the government.
A survey in China found that the use of digital Yuan can benefit gaming industries in gaining more customer base. Internet giants can gain popularity in rural and undeveloped areas of China. They can control the flow of money in rural areas compared to urban areas of China. The benefits through the government to the poor people of China can be directly credited into their accounts with the help of digital Yuan, and the requirement of intermediaries to benefit China’s population can be lower down, which can also help to cut the cost with a considerable benefit to the population.
Small-scale industries, or the retail market of China, can benefit more significantly from digital Yuan by connecting through the Digital Yuan loyalty programs and giving customers a new and fast way to transact. It is like, and peoples are more likely to purchase things from a retailer or wholesaler who accepts credit cards or digital payments because holding cash in a digital world has become a thing of the past.
Agricultural industries may also benefit agriculture; digitally, Yuan will boost the agricultural sector of China, which is in trade relations and reliant on China before their agricultural product. The countries like Ukraine and Brazil buy their products for agricultural use.
A final push toward cashless industries by digital Yuan
Digital Yuan to push China’s economy towards a completely cashless economy, and government can have better surveillance over the citizens and companies. As a result, the cases like money laundering and fraud can be reduced to a great extent. In addition, China’s banks can also control the use of money, storage of money by a citizen, or the amount of saving per person in the form of digital Yuan for their future personal use.
The use of the digital Yuan is rapidly increasing daily, and the big and small industries are coming together toward adopting a completely digitalized economy. The big name seen in the early adoption of the digital Yuan is JD.com, which accepts digital Yuan at its big shopping single days.
JD is an E-commerce company in China that is highly promoting the use of digital Yuan domestically and also cross-border acceptance of digital Yuan in the coming future. JD.com is sharing a link through which the users can get the digital Yuan wallet and also gets a reward of 15 Yuan in their wallet.
These are some of the industries that are using digital Yuan and earning huge benefits offered by digital Yuan. Yuan offers benefits to attract industries and citizens to use digital currencies daily. Digital Yuan is a centralized currency and creates trust and secure channels from the other virtual currencies. The project is still ongoing. It has yet to be a fully developed project and giving views on the success or failure of the digital Yuan at present need to be clarified. The future will decide the success of the digital currency.