Business 4 January 2019

Dan Taylor

China central bank warns of ‘declining relevance’ for cash in digital payments boom

The central bank of China has warned of the declining relevance of cash, amidst a surge in the adoption of digital payment systems.

According to reports in the Financial Times, the People’s Bank of China (PBOC) has become concerned about the pace at which consumers and businesses are moving towards digital systems.

In particular, an increasing number of tourists in China are paying by applications like Alipay and WeChat Pay because visitor attractions are preferring digital to cash payments, or refusing to accept cash altogether.

The problem had become so acute, the bank was forced to remind merchants that refusing to accept renminbi cash is illegal.

In a statement, the bank said the refusal to accept cash was damaging the legal status of China’s currency and undermining the right of consumers to choose their preferred payment methods. According to the PBOC, “In recent years, there have been problems with the circulation of renminbi cash, and the people’s response has been intense. Consumers at tourist areas, restaurants, and retail merchants have had their cash refused, which has damaged the renminbi’s legal status and consumers’ right to choose between payment methods.”

The issue has been on the bank’s radar for some time—even in 2017, some regions of China were reporting as much as 90% merchant transaction volume through these two fintech apps. The apps are even used for payments including salaries, buying groceries and shopping at local markets.

The People’s Bank of China has been a vocal opponent of cryptocurrency, and highly skeptical of digital payment systems, over concerns they could undermine government control of the financial system.

However, as some analysts point out, moving towards digital payment systems could ultimately give governments more control, with access to detailed transaction data not available in the cash economy.

The developments in China correspond to trends in markets elsewhere, with consumers increasingly turning to fintech apps and crypto payments as an alternative to cash.

With an ever increasing number of banks and financial institutions developing digital payment systems and investigating blockchain payments, it looks like this trend is set to continue through 2019.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

‘Irresponsible tweets’ land John McAfee in hot water with Skycoin

Business 22 March 2019

‘Irresponsible tweets’ land John McAfee in hot water with Skycoin

Skycoin has responded on Twitter that it John McAfee’s comments about “whale f--king” that actually led to the project being forced to sever ties with the cryptocurrency influencer.

Read More
Watch out: Fake Wasabi crypto wallet out to steal your crypto

Business 22 March 2019

Watch out: Fake Wasabi crypto wallet out to steal your crypto

The scam wallet is an uncanny clone of the real Wasabi wallet. It comes with a fake website and for those who are not keen, it's almost impossible to distinguish between it and the real one.

Read More
UPS partners with blockchain startup for B2B platform

Business 22 March 2019

UPS partners with blockchain startup for B2B platform

UPS, a global leader in logistics, announced a partnership with Inxeption that targets B2B merchants.

Read More