The digital yuan is entering an already very crowded payments market in China, with smartphone apps WeChat Pay and Alipay already dominating the electronic payments sector. Businesses reported minimal differences in processing payments with the e-yuan compared to existing mobile payment products, although they did note that it does not cost them an additional service free unlike both WeChat Pay and Alipay. Also, payments via the digital yuan can be made without connecting to the internet.
To use the digital yuan for payments, the holder has to scan a merchant’s code using their digital yuan mobile application. The app has an identical user interface as that of Alipay. When scanning, the app supports either a barcode or a QR code. The merchant can scan the code from their customers, or the customers can scan their merchant’s code to activate payment. The app has a feature called “touch” that eliminates the need for a connecting network, provided that the consumer’s and merchant’s mobile devices touch each other when initiating a payment.
According to Assistant Governor Christian Hawkesby, New Zealand’s central bank is actively researching central bank digital currency (CBDC) but has no immediate plans to launch one. They are, however, following developments very carefully, and are among the 80 percent of central banks that are actively researching CBDCs identified in a recent Bank for International Settlements (BIS) survey.
The U.S. Office of the Comptroller of the Currency (OCC) stablecoin letter only address the permissibility of managing reserves for hosted wallets, which requires client onboarding and know-your-customer (KYC), and therefore limits its discussion to private stablecoin networks, and argues that this activity “would not contribute to the global and systemic nature noted” by the FSB. In contrast, the OCC may be suggesting that a public stablecoin’s network design, once launched, could not be walked back, and (absent controls) could provide new avenues for illicit activity at a speed and global scale not currently available.