{"id":210259,"date":"2022-01-05T05:00:50","date_gmt":"2022-01-05T05:00:50","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=210259"},"modified":"2022-01-05T13:46:51","modified_gmt":"2022-01-05T13:46:51","slug":"china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios\/","title":{"rendered":"China enters 2022 with a first-mover advantage on the CBDC front"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The People's Bank of China (POBC) recently released pilot versions of digital yuan wallets for both Android and iOS smartphones, <\/span><i><span style=\"font-weight: 400;\">Reuters<\/span><\/i> <a href=\"https:\/\/www.reuters.com\/markets\/currencies\/china-cbank-launches-digital-yuan-wallet-apps-android-ios-2022-01-04\/?taid=61d40cb1b7327100014b999d&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter\"><span style=\"font-weight: 400;\">reported<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, researchers from Cornell University and the University in Chicago <\/span><a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=3992815\"><span style=\"font-weight: 400;\">outlined<\/span><\/a><span style=\"font-weight: 400;\"> what all the rush is about, and how will the arrival of digital yuan, also known as e-CNY or DCEP, affect the US dollar and the crypto market.\u00a0<\/span><\/p>\n<h2><strong>Pushing forward with e-CNY rollout\u00a0<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">China entered the year with its Central Bank Digital Currency (CBDC) rollout plans at full speed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As of this Tuesday, the e-CNY pilot version app, developed by the PBOC\u2019s digital currency research institute, was available for download on Chinese Android and Apple app stores in Shanghai.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, still being in a research and development phase, the trial app is only available to selected users via supported institutions that provide e-CNY services\u2013including major domestic banks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">CBDCs are imagined to represent a digital form of a country's fiat currency, and currently, dozens of central banks worldwide are <\/span><a href=\"https:\/\/cbdctracker.org\/\"><span style=\"font-weight: 400;\">exploring<\/span><\/a><span style=\"font-weight: 400;\"> their options on whether and how to pursue issuance.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Among ongoing projects in the research and development phase, the most recent announcements come from Mexico and Jamaica.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the end of last year, the Bank of Mexico <\/span><a href=\"https:\/\/elceo.com\/economia\/banxico-cbdc-moneda-digital\/\"><span style=\"font-weight: 400;\">revealed<\/span><\/a><span style=\"font-weight: 400;\"> its plans to launch a CBDC by 2024, while Jamaica <\/span><a href=\"https:\/\/jis.gov.jm\/bank-of-jamaicas-cbdc-pilot-project-a-success\/\"><span style=\"font-weight: 400;\">finalized<\/span><\/a><span style=\"font-weight: 400;\"> an eight-month-long pilot project and prepares for a nationwide rollout in Q1 2022.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, privacy advocates, including Edward Snowden, have <\/span><a href=\"https:\/\/cryptoslate.com\/could-the-proposed-us-digital-dollar-be-self-annihilating-edward-snowden-seems-to-say-so\/\"><span style=\"font-weight: 400;\">warned<\/span><\/a><span style=\"font-weight: 400;\"> about this new, digital form of centralized currency\u2013arguing CBDCs could usher the state\u2019s ultimate financial control, and erode the privacy of citizens.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, could the US also be stepping up its digital dollar game?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As revealed by a recent job posting, the Federal Reserve Bank of Boston is looking for a new director of product management for Project Hamilton\u2013the US CBDC pilot program, which, thus far <\/span><a href=\"https:\/\/home.treasury.gov\/system\/files\/136\/StableCoinReport_Nov1_508.pdf\"><span style=\"font-weight: 400;\">remained<\/span><\/a><span style=\"font-weight: 400;\"> in the shadow of the country\u2019s main digital currency agenda\u2013crypto regulation.\u00a0<\/span><\/p>\n<h2><strong>Global battle of currencies<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">\u201cOnce implemented, CBDCs would immediately alter the endogenous value of other currencies, whether fiat or digital, as well as other countries incentives to implement their own digital currencies,\u201d according to Lin Cong and Simon Mayer, who addressed the global competition among national fiat currencies, cryptocurrencies, and CBDCs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In their recent paper titled \u201cThe Coming Battle of Digital Currencies,\u201d Cong and Mayer developed a model that rationalizes why countries with stronger currencies are more prone to banning or regulating crypto, while countries with weak currencies are more eager to take the opposite approach and legalize the adoption.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cCountries with strong but non-dominant currencies (e.g., China) are most incentivized to launch CBDC due to both technological first-mover advantage and potential reduction in dollarization. The strongest currencies (e.g., the US) benefit from developing CBDC early on to nip cryptocurrency growth in the bud and to counteract competitors\u2019 CBDCs. The weakest nations forgo implementing CBDCs and adopt cryptocurrencies instead,\u201d their model suggests.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">According to their model, CBDCs offer the most advantages for countries that have a relatively strong, yet not dominant currency\u2013which would be the case with China, India, and the Eurozone.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition, their findings suggest that \u201cthe implementations of CBDC by these countries pose more danger to the crypto market than the launch of CBDC by the dominant currency country, i.e., the US.\u201d<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cWe also find that the dominance of the US dollar causes \u201cinertia\u201d that hampers the incentives of the US to implement CBDC. The recent spike in US inflation, however, potentially undermines the dominance of the US dollar and improves government incentives to venture into CBDCs,\u201d Cong and Mayer concluded.<\/span><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The People&#8217;s Bank of China (POBC) recently released pilot versions of digital yuan wallets for both Android and iOS smartphones, Reuters reported.\u00a0 Meanwhile, researchers from Cornell University and the University in Chicago outlined what all the rush is about, and how will the arrival of digital yuan, also known as e-CNY or DCEP, affect the [&hellip;]<\/p>\n","protected":false},"author":699,"featured_media":210273,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[76669],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>China enters 2022 with a first-mover advantage on the CBDC front<\/title>\n<meta name=\"description\" content=\"The People&#039;s Bank of China (POBC) recently released pilot versions of digital yuan wallets for both Android and iOS smartphones.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China enters 2022 with a first-mover advantage on the CBDC front\" \/>\n<meta property=\"og:description\" content=\"The People&#039;s Bank of China (POBC) recently released pilot versions of digital yuan wallets for both Android and iOS smartphones.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-05T05:00:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-05T13:46:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/digital-yuan.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Ana Grabundzija\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ana Grabundzija\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/china-enters-2022-with-a-first-mover-advantage-on-the-cbdc-front-releases-pilot-versions-of-digital-yuan-wallet-apps-for-android-ios\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/#person\",\"name\":\"Ana Grabundzija\",\"url\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/ana-grabundzija\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2021\/05\/cs-author-ana-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2021\/05\/cs-author-ana-300x300.jpg\",\"caption\":\"Ana Grabundzija\"},\"jobTitle\":\"Journalist\",\"description\":\"Dr. Ana Grabundzija is a Zagreb-bred writer with an academic background in anthropology. 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