Digital yuan hasten Asia e-currency race-cover tape|carrier tapes|NEXTECK

Digital yuan hasten Asia e-currency race

The COVID-19 pandemic has accelerated digitalization of currency, central banks worldwide are increasingly looking into issuing electronic forms of fiat currencies. Last October, Cambodia became the first Asian country to formally launch such a system. Numerous others, from Thailand and Singapore to Japan and South Korea, are conducting research and trials.

PRC push for a "digital yuan," may have the greatest potential to impact the global economy, considering the government's ambition to internationalize its currency. More e-yuan programs are planned during the Beijing Winter Olympics in 2022.

China is no stranger to digital money. Hundreds of millions of consumers use the Alipay and WeChat Pay services, scanning QR codes on their smartphone screens instead of fumbling for notes and coins. The digital yuan works much the same way.

But it is not the same, as the Bank for International Settlements explains.

A central bank digital currency (CBDC) is a "central bank-issued digital money denominated in the national unit of account, and it represents a liability of the central bank," the BIS says. Unlike existing e-money and cryptocurrencies, the bank continues, a CBDC represents a direct claim on a central bank rather than a liability on a private financial institution.

Analysts at Singapore's DBS Bank highlighted the digital yuan's potential in Africa in a recent report, pointing out that Huawei Technologies' new smartphones have a built-in digital yuan wallet.

The yuan, given its stability, could be integrated into Africa's payment ecosystem that is increasingly dominated by Chinese companies.
Digital currencies are considered an effective means to prevent money laundering and other criminal activity, but this also means authorities have more control.

The Bank of Thailand, the Bank of Korea, the Bank of Japan on 2021 released their own plans for CBDC trials, with the first experiment expected in the fiscal year starting in April 2021.

Hopefully semiconductor sectors will accept e-currency for settlement in packaging materials like WLCSP carrier tape and precision cover tape, major supplied by Nexteck Singapore Pte Ltd.

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