The digital Yuan will also reach South Korea
The digital Yuan will also reach South Korea
Crypto

The digital Yuan will also reach South Korea

By Marco Cavicchioli - 12 Jun 2020

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China’s new electronic currency, the digital Yuan, could also be used in South Korea. 

This is reported by the Korean online newspaper Yonhap, according to which it is possible that Korean stores with Chinese customers may end up accepting payments in this new currency. 

It is very likely that the Chinese government, once the digital Yuan is launched, will push hard for its mass adoption among citizens as a replacement for cash. 

This will also apply to Chinese people travelling abroad, particularly tourists. 

Indeed, the Korean newspaper writes: 

“The digital Yuan is expected to first be used for micro-payments in China, but in the future it is expected to be used worldwide, in view of the internationalization of the Yuan”. 

In particular, the Chinese digital currency could be used in those countries where economic relations with China are more active, as in many Asian and African countries, including South Korea. 

In South Korea, many shops for tourists which are frequented also by Chinese people are already using Chinese payment methods such as Alipay. In the future, it is more than plausible that they will also accept payments in digital Yuan to facilitate purchases for Chinese customers.

Yonhap also reports that the new Chinese digital currency has already been developed and is expected to be released to the public at any time, based on the political decisions of the party and its leaders. 

In addition, the Korean newspaper also explains that the real reason why the Chinese authorities have decided to introduce this digital version of their currency is that this way they can keep track of all financial transactions since the digital Yuan has a completely different philosophical and technological basis from the blockchain-based Bitcoin.

China has always refused to reveal all the technical details of how its digital currency works and it is highly unlikely that it is based on blockchain technology. 

Many experts suspect that it will only be used in part by the Chinese, since, unlike Bitcoin for example, it does not allow anonymous transactions and presumably will not have a public ledger. 

In other words, it could be used primarily as a state tool to be able to analyze in detail every transaction made by its users, since the ledger will be centralized and managed by the central bank of the country (PBoC). 

Despite the Chinese government’s promises to protect the privacy of users of the digital Yuan, it actually seems that very few people really believe that this will happen. 

In theory, the PBoC is supposed to analyze transactions only if there is suspicion that they are involved in illegal activities. However, as only suspicion is necessary, and since it can actually analyze any transaction, the PBoC can examine practically any transaction in a very arbitrary way.

It is worth noting that the Chinese are already large users of Tether for example, probably due to the fact that USDT allows free and anonymous (or pseudo-anonymous) international transactions. 

It is not unreasonable to imagine that a possible mass spread of digital Yuan, instead of cash, could push more and more Chinese people to use completely free currencies with a higher level of anonymity, such as USDT or other cryptocurrencies. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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