South Korean media suggest that local merchants may accept the next digital yuan as a payment method once the COVID-19 pandemic passes and the flow of Chinese tourists into the country increases.
According to the Bitcoin Lifestyle news agency, domestic merchants have been increasingly considering taking advantage of China’s next digital currency, citing some tourist shops in their examples.
Taking advantage of Chinese tourism
The report details that in Seoul’s Myeongdong district, some stores have been accepting payments from Alipay, thus showing interest in customers in China.
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Reports indicate that the COVID-19 crisis has caused close to USD 2 billion in damage to tourism revenues. Due in part to this fact, merchants have begun to consider the digital yuan as a method of payment once it is launched.
Risks of accepting the digital yuan in a foreign country
However, the author of the article warned against accepting the digital yuan as a method of payment.
They cite privacy issues and „Big Brother“ supervision:
„If people in other countries make widespread use of the ‚digital yuan‘, centrally administered by the People’s Bank of China, it is likely that the use will be exposed to the Chinese authorities.
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Yonhap’s author cites that Chinese digital currency has a „completely different philosophical and technological basis from the blockchain-based bitcoin technology (BTC).
The concerns are shared by other experts, such as Joel Telpner, a lawyer and advisor to the Marshall Islands‘ digital sovereign currency project. He told Cointelegraph about the motivations of countries like China to create a state-backed digital asset:
„I think the motivations are not necessarily the same in every country for better or worse. I tend to look at China a little bit differently than other countries because I think, and this is just my own beliefs, but I think one of the motivations for China is to make sure that they can maintain control over payments and outputs by creating a digital currency that has built-in ID for the Chinese government, and unfortunately it also becomes a surveillance tool.
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Latest developments of the digital yuan project
On April 15, Cointelegraph reported that screenshots of a supposed pilot version of a wallet application for China’s next digital yuan were circulating on social networks. It was suggested that the application was being tested in four Chinese cities.
Former People’s Bank of China President Li Lihui said on May 6 that the launch of the digital yuan could replace cash if critical conditions are met.