Qian said, “The People’s Bank of China was one of the first central banks that responded to the ‘Wake-up Call’,” and took action. The reduction in cash as a result of the two dominant private payment providers and the rise of decentralized digital currencies were a “wake-up call”. Hence the CBDC motivation is to provide an alternative to WeChat Pay and Alipay. The other main transactions by the two big wallet providers are those touching banks processed by NetsUnion Clearing, which the People’s Bank of China set up. UnionPay is China’s answer to Visa and Mastercard, but state-owned. Ledger Insights previously reported that barcode payments via WeChat Pay and Alipay wallets were required to be cleared via UnionPay since 2018, giving the central bank oversight. “In fact, third-party payment technology can already enable the transparency of all real-time transactions,” said Qian, who is currently a Director at the China Securities Regulatory Commission (CSRC) as reported in Sina. Helping the government to monitor real-time transactions was not the motivation behind the digital yuan, observed Qian. Powell said that the Chinese government would use the digital yuan to watch all payments in real-time. Part of Qian’s speech was a rebuttal of comments made by Federal Reserve Chairman Jerome Powell at the end of April. As he’s no longer working at the central bank, the executive highlighted that his views were personal ones. And he reaffirmed that the eCNY is a synthetic CBDC. He also observed that a central bank digital currency ( CBDC) such as a digital yuan could additionally operate on blockchains such as Ethereum and Diem. The former leader of China’s digital currency research through to 2018, Yao Qian, commented that the purpose of a CBDC is not to monitor payments because it can already do that.
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