Hi. Brady here.
Let me start by saying I’m skeptical about paying for things with phones. I like the feel of legal tender between my fingers. People spend a lot of time designing coins and bills, and seeing how certain scenes or cultural elements are chosen to highlight a place is always interesting. Plus, there are incredible anti-counterfeit features in some of them, like watermarks! Do you know why some coins have ridges along their edges and what that has to do with Isaac Newton? Go find out after you read this newsletter. Cash is cool in more than one way!
Anyway… hearing about China’s digital yuan—centralized, tracked, no banknotes or coinage to admire—makes me raise my eyebrow. But hey, it’s here, it’s happening, so we have to find out more about it.
Over in Beijing, my colleague Julianna spent a weekend figuring out what the fuss is about. In the capital, cash can be exchanged for e-CNY at 3,000 ATMs. But for Julianna, setting up two wallets took two hours (and visits to bank branches). Her first purchase was a watermelon that cost 82 yuan, or a little under 13 US dollars. The adventure was bumpy but the transaction was smooth.
Based on Julianna’s observations, people generally aren’t hopping on board to use the digital yuan so far. It isn’t a matter of privacy or centralization as it might be elsewhere; rather, existing means of payment like Alipay and WeChat Pay are much more convenient and deeply entangled with people’s spending habits, so there’s little reason to peel away.
Nearby, Thailand has lined up tests for its digital baht, and Indonesia is pondering the same for its rupiah. We’re still some time away from the full roll-out of the digital yuan. Between now and then, China’s central bank may come up with new ways to convince people to use it. But for now, it’s still a novelty.
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