China has been carrying out a full-scale test for several months on its territory to ensure that the digital yuan, also known as the DCEP (for Digital Currency Electronic Paiement), works and is accepted by the population. After the city of Shenzhen, it is Suzhou’s turn to host the second giant lottery organized by the government, the objective of which is assess the consumption behavior of citizens.
How will consumers react?
This time around, the government was even more generous than in the first lottery. 100,000 digital 200 yuan lots (the equivalent of 25 euros) were distributed to the inhabitants of Suzhou. During the first test in Shenzhen, the authorities noticed that some residents had shown themselves reluctant to use an MNBC (central bank digital currency). Today, the government is trying to convince them a second time by telling them that: “A merchant can refuse a payment with AliPay or WeChat Pay, but cannot refuse a payment with an e-yuan”.
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The digital yuan continues to advance: in the long term, the People’s Bank of China wants the digitized yuan completely replaces banknotes and coins. The government’s promise is: “The digital yuan must offer Chinese citizens a more secure and convenient means of payment on a daily basis”. What the government does not say but everyone knows is that such a currency also allows trace citizens’ purchases.
Yet according to the South China Morning Post, the future of the digital yuan is uncertain as Chinese consumers and traders have already adapted to AliPay and WeChat Pay. A new payment method also means a new application on the smartphone, which is not to everyone’s liking.
No commission is charged on the digital yuan
This second test in Suzhou will certainly allow refine it all. This large metropolis in East Jiangsu Province is one of the four cities designated to test the digital yuan. China’s central bank is also testing its MNBC in the cities of Chengdu and Xiongan and therefore Shenzhen. The venues for the 2022 Winter Olympics are also areas where the digital yuan is currently being tested.
In Suzhou, the experimentation with 100,000 citizens started on December 12 to coincide with the famous “12/12”, the equivalent of “11/11”, a day of sales where the web giants break all records each year. year. The nuance that could lead Chinese merchants to prefer the digital yuan to WeChat Pay and AliPay solutions is the fact that payments go directly to the interested party’s bank account, without fees or commissions.
A real difference with the solutions developed by Alibaba and WeChat. As one Chinese trader sums it up very well: “WeChat Pay and AliPay are wallets, while the digital yuan is the money that is in the wallet”.
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