Will money from China change the world?
Its ability to stay ahead of Japan and the United States is 17:53 on March 24.
"The Winter Olympics have been unveiled."
What the Western media and others have told us is not the competition, but the latest technology being developed by China.
That is the "digital currency" that digitizes coins and banknotes.
Demonstration experiments are underway in Japan as well, but China is two or three steps ahead of the major countries.
As we proceeded with the interview, we could see the challenges facing China.
(Ryoto Iga, Reporter, Directorate General of China / Yosuke Yoshitake, Reporter, Washington Bureau)
I tried using digital currency
What is China's digital currency at the forefront of the world?
I actually tried using the reporter (Iga).
It's very easy to use.
You can get "Digital RMB" by downloading the app on your smartphone, setting up a dedicated account (wallet), and depositing from your bank account.
At fast food restaurants that support digital RMB, payment is completed simply by displaying the QR code on the accounting terminal and holding it over.
Since it is a currency, it is a system led by a central bank, but its usage is almost the same as the cashless payment called "○○ Pay" by a private company that is popular in Japan.
For the Olympic payment method
This "Digital RMB" was introduced in the Olympic Village and Media Center as the official payment method for the Games at the Beijing Olympics and Paralympics held from February to March.
Until now, payment methods at the Olympic Games have been limited to cash or the tournament sponsor credit card company "VISA", but it was also reported that the digital yuan has joined the group and "has driven VISA away".
This card was mainly used at the Olympics.
Athletes, tournament officials, and media officials charged this card and used it to pay for convenience stores and restaurants.
Digital RMB here and there
In fact, the digital RMB is already available elsewhere.
In Beijing, you can see the digital yuan mark everywhere in convenience stores, gas stations, markets, subways, and so on.
It can also be used when ordering food and drink delivery, and even has the ability to pay the party fees of the Chinese Communist Party.
As a result of the end of last year, the central bank "People's Bank of China" that created the digital yuan became available in about 8 million locations in more than 10 cities nationwide, and wallets for 260 million people have been opened. He emphasizes that the transaction amount was more than 1.6 trillion yen in Japanese yen.
Is interest low in Japan?
However, when I interviewed in the city, I got an unexpected reaction from the citizens.
"I've heard but never used"
"I haven't used it because it's not popular yet. I don't ask anyone around me."
When trying to pay using digital RMB in the market, the clerk took a lot of time to operate and tweeted.
"I forgot because I haven't used it for a while. There are no users."
Life in China where you don't need cash
That should be it.
Cashless payments provided by private IT companies such as "Alipay" and "WeChat Pay" are already widespread in China.
Cash-free life is commonplace in urban areas of China.
The reporter himself hasn't used cash for shopping or eating out for more than a year and a half since he was posted in August.
The number of users is more than 1 billion for "Alipay" and more than 800 million for "WeChat Pay".
The scale of payment is estimated to be about 4000 trillion yen a year, which is overwhelming the newly started digital RMB.
IT company "threat"
Why is China trying to popularize the central bank-led digital RMB when cashless society is progressing so far?
The background is that "Alipay" and "WeChat Pay" are not just payment methods, but are indispensable as infrastructure for daily life.
The IT companies that operate it utilize the data of many users to provide various services such as small loans, insurance, online shopping, and payment of utility bills.
The structure in which huge amounts of big data are accumulated in private IT companies makes it difficult for central banks to see the flow of money.
If this situation goes further, it will be difficult for central banks to move their economies through monetary policy.
In addition, if the services of private companies are stopped in an emergency such as a disaster, the economy may be seriously disrupted.
Chinese authorities appear to have these concerns.
Therefore, we are trying to popularize the digital RMB that can be used for direct payment without going through the services of private companies so that the central bank can grasp the movement of money as data.
Experts explain the importance of the digital RMB:
Renmin University of China Associate Professor Chenghua
“Currency and payment systems are financial infrastructure, which can be a source of instability if they fall into the hands of private institutions.
Central banks maintain some control over currency issuance and payment systems. It is very important for China's financial and economic stability. "
What about America that is "late"?
While China is ahead, the trend is focused on the United States, which has a great influence on the world financial system through the key currency dollar.
Until now, the government and central banks have not shown a positive attitude, but in March President Biden issued a presidential directive on digital strategies, indicating that he would consider the digital dollar positively.
He clarified that he "secures international leadership" as the main aim to direct research and technological development in a hurry.
It can be seen that the Biden administration is becoming more cautious about the digital RMB.
However, there is no consensus on the introduction of the digital dollar in the United States.
Many Democrats in the ruling party agree that "many workers will have access to free bank accounts and cheap payment methods."
On the other hand, opposition and Republican lawmakers have been cautious, saying, "It is not desirable for government agencies to be able to track individuals with data and monitor bank transactions."
It is the current location of the United States that it takes more time to design the system, and it does not mean that it will go on steadily.
Is it a means of "escape from sanctions"?
In the world, Russia, which has now invaded Ukraine, has been locked out of the international payment network "SWIFT" and is under economic influence.
Will these sanctions be less effective in the dollar-based financial system if the yuan is digitized and used more widely?
Most experts say that it won't happen right away.
The yuan's share of international payments is currently 3%, which is a big gap with the dollar, which accounts for 40%.
The renminbi is considered to be an "unusable" currency in an attempt to further increase its market share.
Nomura Capital Markets Research Institute Beijing Office Chief Representative Sekine
"China regulates the movement of the renminbi overseas in order to stabilize the domestic financial market, and even if the digital yuan becomes more convenient, it is an international currency. It is unlikely that it will be distributed on a large scale.
There are technically high hurdles to creating a system that can process a large number of payments instantly, and there is also the problem of who will bear the enormous cost of operating the system. "
Will digital currencies change the world?
There are various other issues with the digital RMB, such as how to cover the cost of dissemination, and it is expected that full-scale issuance will take time.
Nevertheless, China is steadily taking steps toward internationalization, such as conducting joint research with central banks such as Thailand and the UAE = United Arab Emirates.
For this reason, it has been pointed out that it may lead the creation of international rules for digital currencies and increase their influence.
Currencies that were once "things" such as seashells have changed to money and banknotes, and people's lives and economic activities have also changed.
For that reason, the world is paying close attention to whether the digitization of currencies will change history.
Ryoto Iga , Director of
China General Bureau
Joined in 2006
Sendai Bureau Okinawa Bureau
Economic Department, etc.
Washington Bureau Reporter
Joined NHK Nagoya Broadcasting Station in 2004
After working at the Ministry of Economic Affairs, he is currently affiliated.Keywords: