Understand all about e-yuan, the digital currency that China is promoting during the 2022 Olympics

China has launched a comprehensive trial of its electronic money on the Olympics website, aiming to make the electronic yuan the most widely used payment method in the country. But how does it work?

For the Winter Olympics, China saw the big picture. In addition to great facilities and many technical gadgets (including a fleet of robots and this amazing connected bed), Beijing He wanted to take the opportunity to highlight another novelty, the electronic yuan.

E-Yuan is the name of the Chinese digital currency, also known as e-CNY. The digitization project, which began in 2014, is over, and the Chinese government now wants to make it accessible to as many people as possible. So much so that in the various locations where the Olympic events are held, payment can only be done in cash, by Visa card, or by electronic yuan, except for the two most popular payment applications in the country.

Cryptocurrency projects are multiplying all over the world, especially in the European Union, where they are presented as faster and more efficient than traditional means of payment. However, these currencies are regularly confused with cryptocurrencies, which have nothing to do with them. We explain everything you want to know.

What is the electronic yuan?

The Chinese electronic yuan project is one of the oldest and most ambitious. Launched in 2014, the project is now almost complete: the early stages of testing began in a few select cities in 2020, before a more generous formal launch with the Olympics. And it’s a success: In January, Beijing announced that more than 261 million people use the app to pay with e-CNY, and the number of users has nearly doubled since October.

Concretely, the electronic yuan is issued by a central authority, the People’s Bank of China. So it is not a decentralized project, like cryptocurrencies. The value of e-CNY is equal to the value of the classical yuan, and we can say, in a simplified way, that e-yuan are units of real currency converted into virtual units.

In the end, for users, there will not necessarily be much difference between electronic yuan and traditional currency in their use. The electronic yuan can be stored in a government-developed wallet, but it is also available on WeChatPay and AliPay, the two major payment applications in the country.

Alipay is one of the most used apps in China // Source: Markus Winkler / Unsplash

What is the difference with card payments?

The real difference is in the transactions themselves. A document published by the Bank of China in July 2021 states that payments will be more secure, Thanks to ” A suite of measures, including digital certificate systems, electronic signatures, and an encrypted storage system, to make double payments, illegal copying, counterfeiting and transaction tampering impossible.H. ”

According to the Science and Technology Daily, the official newspaper of the Ministry of Science and Technology, which questioned the Bank of China on the matter, payments will be especially faster. ” This method is more effective because it allows direct transfer of funds, without going through banks, which means that they end directly in bank accounts in real time. “Explains the newspaper. This system also makes it possible to do without intermediaries, such as Visa, MasterCard or American Express, who take a certain percentage for each transaction.

Danger to private data?

Finally, and this is one of the most important elements of this payment system: population control. All transactions made by users will be viewable by China’s central bank, and in a country where the government already wields enormous power over its people, this new layer of control isn’t a detail at all.

The e-yuan will allow the Bank of China to be able to monitor transactions in real time, both those of individuals and those of businesses that will use e-CNY.

In its article, the Science and Technology Daily talks about the system ” Protect more privacy “Because electronic money makes it possible” Anonymity control, better protect personal information But it does not provide more details. One can doubt his definition of privacy protection.

At the moment, the electronic yuan is not expected to be widely adopted anytime soon. Outside the Olympics area, the Chinese electronic yuan is only available in about a dozen cities. Moreover, there will certainly be a number of years between the moment when digital currency will be accessible to everyone, and when it will become the most widely used means of payment. But China is currently still the only country where its use is actually possible – and the creation of the e-euro, in the European Union, remains a far-fetched project.

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