The concept of digital currency is relatively new, and many people are still trying to wrap their heads around it. While the world is still figuring its way around digital assets like Bitcoin, China has taken a step further by launching its centralised digital currency, Digital Yuan. You can visit for altcoins to avail yourself of precise bitcoin trading calls. China has taken its step in its war against global currencies like Bitcoin & Ethereum by launching this digital currency. However, Digital Yuan (aka e-CNY) misses out on one of the significant concepts of Bitcoin, its decentralised nature.
The Chinese government controls the digital Yuan, authorities operating e-CNY, and The People’s Bank of China. This centralised nature of Digital Yuan raises concerns regarding the privacy and anonymity of its users. Here’s what you need to know about the Digital Yuan; how it works, how it’s different from Bitcoin or other types of digital currency, and why investing in this type of virtual money can be hugely beneficial for those living outside of China.
Working on Digital Yuan
While users will be given digital account numbers and passwords, the e-CNY operates on a centralised network like more traditional banks. There’s no option to store data on your device. Compared to other digital currencies like Bitcoin or even Ethereum, where the storage (and ownership, for that matter) of data is decentralised and governed by Blockchain, Digital Yuan is not decentralised. It makes e-CNY a lot riskier than other virtual currencies and should be wisely treated as a financial asset instead of a hard currency.
Can You Make Peer-To-Peer Transfers With Digital Yuan?
Yes, you can. You can transfer it peer-to-peer and make small payments online as well. So whether you are looking to send money to your friend or pay any street vendor in China, you can use Digital Yuan everywhere. While making transfers to other peers, the transfer limit will depend on the type of wallet used on both ends.
Currently, two online banks allow you to make transfers using e-CNY (Digital Yuan), WeBank by WeChat Pay, and MyBank by Alipay. Additionally, you can use the Digital Yuan app that supports NFC transactions, allowing you to make the transfer by touching phones together. Earlier, in the first week of April this year, Tencent announced that the users on its social media platform WeChat can use Digital Yuan to make transfers and payments.
What Makes Digital Yuan Unique?
Now that you know how to buy and sell Digital Yuan, it’s time to learn why it’s so different and even better than other virtual currencies. It makes sense for the Chinese government to launch Digital Yuan in the first place. Their goal is to become a global power in terms of technology, so launching their digital currency and making sure is another step towards the plan. The government has reasons for establishing Digital Yuan, while Bitcoin (and other alternative coins) are outside its control.
Digital Yuan can be an alternative tool to improve China’s economy. With a vast and growing economy that dominates the world, the government wants to make sure that and expand more. Digital Yuan is one of those ways to expand its influence on the global economy.
Charges Associated With Using Digital Yuan
Yes, there are a few changes. The first charge is to pay a 0.2% annual management fee for holding your digital currency in the bank’s digital wallet or account. Then, you need to pay a 0.1% fee for making transactions using the bank’s network (or any third-party network).
Due to its centralised nature, Digital Yuan is also perfect for China’s population because it allows them to transact and pay bills across different provinces without having a physical presence in each province. The e-CNY can be used anywhere in China and transfer money across regions, eliminating the need to carry cash or go through banking issues when moving around.
The Digital yuan is a perfect example of why it’s not wise to invest in virtual currencies based on Blockchain technology. While the digital Yuan is still new, it’s becoming more and more evident that the market is too volatile, too centralised, and much less private than other virtual currencies like Bitcoin or Ethereum. That’s why this is not a good investment for you to make.