{"id":6840,"date":"2022-01-13T09:12:29","date_gmt":"2022-01-13T09:12:29","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=6840"},"modified":"2022-01-21T08:48:21","modified_gmt":"2022-01-21T08:48:21","slug":"growing-east-west-divide-on-central-bank-digital-currency","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2022\/01\/13\/growing-east-west-divide-on-central-bank-digital-currency\/","title":{"rendered":"Growing East-West divide on central bank digital currency"},"content":{"rendered":"<p>As China launches its state digital currency, the US and UK appear to be stepping away from the idea.<\/p>\n<p><strong>Full steam ahead in China<\/strong><\/p>\n<p>Last week China took another big step towards the introduction of its new central bank digital currency (CBDC) with <a href=\"https:\/\/asia.nikkei.com\/Spotlight\/Caixin\/China-launches-digital-yuan-app-in-pilot-cities-nationwide\">the launch of a new app<\/a> for iOS (Apple) and Android phones.<\/p>\n<p>The so-called \u2018e-CNY\u2019 (digital yu\u2019an) app is available to users in 12 Chinese cities and regions, as well as the host cities for next month\u2019s Winter Olympic Games, Beijing and Zhangjiakou.<\/p>\n<p>According to Nikkei Asia, once the app is granted permission to check a phone&#8217;s location, eligible users in those places can sign up for an account and start using the app&#8217;s digital wallet.<\/p>\n<p>China\u2019s CBDC operates as a public-private partnership and users of the app will have to link one of nine partner banks with their digital wallet.<\/p>\n<blockquote><p>Foreign athletes and visitors during the Winter Olympics will be able to use e-CNY for payments<\/p><\/blockquote>\n<p>Wallet owners will be able to transfer money between their own bank accounts and wallets and to other e-CNY users.<\/p>\n<p>The system will also accommodate offline payments, like Alipay and WeChat Pay, the dominant mobile payment systems in China.<\/p>\n<p><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-01-10\/china-offers-digital-yuan-at-olympics-to-test-overseas-appeal\">According to Bloomberg<\/a>, foreign athletes and visitors during the Winter Olympics will also be able to use e-CNY for payments.<\/p>\n<p>Visitors will be able to download the app or get a card that stores the digital yuan, or convert foreign bank notes into e-CNY at self-service machines, according to the Bank of China Ltd, a state lender and official partner of the games.<\/p>\n<p>Athletes and their coaches will be eligible to get wristbands that act as e-wallets and can be swiped to pay for goods or services.<\/p>\n<p>According to Richard Turrin, a China expert and author of <em>Cashless<\/em>, a book on the country\u2019s digital currency project, China is also laying the ground for the use of the e-CNY overseas by means of its \u2018Belt and Road\u2019 infrastructure initiative, with many near-neighbours to the US participants in the initiative.<\/p>\n<blockquote><p>China is also laying the ground for the use of the e-CNY overseas<\/p><\/blockquote>\n<p>As of December 2021, 19 out of 33 countries in Latin America and the Caribbean had signed up for the Belt and Road. In addition to Cuba, they include Jamaica and six other island states in the Caribbean; El Salvador, Costa Rica and Panama in Central America; and Venezuela, Guyana, Suriname, Ecuador, Peru, Bolivia, Chile and Uruguay in South America.<\/p>\n<p>Turrin was <a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/02\/17\/going-cashless\/\">a 2021 guest on the <em>New Money Review podcast<\/em><\/a>.<\/p>\n<p><strong>Little support for UK or US CBDC<\/strong><\/p>\n<p>But while China moves full steam ahead with its state digital currency project, the UK and the US show few signs of following suit.<\/p>\n<p>Today the influential Economic Affairs Committee of the UK\u2019s House of Lords has released <a href=\"https:\/\/committees.parliament.uk\/publications\/8443\/documents\/85604\/default\/\">a report<\/a> in which it questions the need for a British CBDC.<\/p>\n<p>\u201cThe introduction of a UK CBDC would have far-reaching consequences for households, businesses, and the monetary system for decades to come and may pose significant risks depending on how it is designed,\u201d the report\u2019s authors said.<\/p>\n<blockquote><p>a US CBDC would \u201cput the [Federal Reserve] on an insidious path akin to China\u2019s digital authoritarianism\u201d<\/p><\/blockquote>\n<p>\u201cThese risks include state surveillance of people\u2019s spending choices, financial instability as people convert bank deposits to CBDC during periods of economic stress, an increase in central bank power without sufficient scrutiny, and the creation of a centralised point of failure that would be a target for hostile nation state or criminal actors.\u201d<\/p>\n<p>In the US, a member of the House of Representatives <a href=\"https:\/\/cointelegraph.com\/news\/us-lawmaker-proposes-bill-aimed-at-limiting-fed-s-ability-to-issue-cbdc\">yesterday introduced a bill<\/a> aimed at preventing the country\u2019s central bank from issuing a CBDC.<\/p>\n<p>Minnesota Representative Tom Emmer said that a US CBDC would \u201cput the [Federal Reserve] on an insidious path akin to China\u2019s digital authoritarianism.\u201d<\/p>\n<p><strong>Keeping money public<\/strong><\/p>\n<p>Earlier this week, researchers at the Basel-based Bank of International Settlements (BIS) said that a CBDC could be one of the public infrastructures necessary to prevent large tech firms from taking over money completely.<\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2022\/01\/11\/public-infrastructures-can-prevent-big-tech-money-grab\/\">In a new working paper<\/a>, economists Karen Croxson, Jon Frost, Leonardo Gambacorta and Tommaso Valletti highlighted the growing power of digital platforms like Google, Facebook (Meta), Amazon, Alibaba and Tencent.<\/p>\n<p>The economists said that new public infrastructures, such as state-issued digital identity, retail fast payment systems and central bank digital currencies (CBDCs), together with competition rules and requirements for data portability, currently offer the most promising way to control tech platforms\u2019 power.<\/p>\n<p><em><a href=\"http:\/\/eepurl.com\/du6eTr\">Sign up here<\/a> for the New Money Review newsletter<\/em><\/p>\n<p><em><a href=\"https:\/\/blubrry.com\/newmoneyreview\/\">Click here<\/a> for a full list of episodes of the New Money Review podcast: the future of money in 30 minutes<\/em><\/p>\n<p><span style=\"text-decoration: underline;\">Related content from\u00a0<em>New Money Review<\/em><\/span><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2019\/12\/18\/how-india-leapfrogged-the-west-in-payments\/\">How India leapfrogged the West in payments<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2020\/07\/07\/breaking-the-grip-of-the-platforms\/\">Breaking tech platforms&#8217; grip<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2020\/06\/23\/rise-of-the-platforms\/\">Rise of the platforms<\/a><\/p>\n<p><a href=\"https:\/\/newmoneyreview.com\/index.php\/2021\/02\/17\/going-cashless\/\">Going cashless<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As China launches its state digital currency, the US and UK appear to be stepping away from the idea. Full steam ahead in China Last week China took another big [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":6842,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1013,1012,1053,1026,1014],"tags":[1289,1387,2097,2096],"class_list":{"0":"post-6840","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-account","8":"category-exchange","9":"category-featured-1","10":"category-latest-slider","11":"category-payment","12":"tag-cbdc","13":"tag-china","14":"tag-emmer","15":"tag-house-of-lords"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Growing East-West divide on central bank digital currency - New Money Review<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/newmoneyreview.com\/index.php\/2022\/01\/13\/growing-east-west-divide-on-central-bank-digital-currency\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Growing East-West divide on central bank digital currency - New Money Review\" \/>\n<meta property=\"og:description\" content=\"As China launches its state digital currency, the US and UK appear to be stepping away from the idea. 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