- The digital yuan can replace cash if it meets four conditions: greater efficiency, lower transaction costs, enough economic scale with commercial value, and people’s acceptance.
Former President of the Bank of China Li Lihui has said that the launch of the digital yuan is close and imminent. According to Li, the currency, which is currently at testing phase, could replace fiat currency in China if it meets four conditions.
The imminent launch of the currency has garnered excitement among investors and online searches about the impact of digital yuan and cryptocurrencies, in general, has seen a surge. In a live streaming talk on People’s News on 5 May, he said that the digital currency is different from other payment platforms such as Alipay and WeChat pay in the fact that the digital yuan has no association with any third party. In addition, he mentioned four conditions that need to be met in order for Yuan t replace other forms of payment.
“Whether the digital Yuan can become the dominant form of currency and mainstream payment means, depends on whether it has greater efficiency, lower transaction costs, enough economic scale with commercial value, and people’s acceptance.”
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