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Digital Yuan CBDC Momentum Grows as More Chinese Firms Get to Testing

Digital Yuan CBDC Momentum Grows as More Chinese Firms Get to Testing

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4 years ago

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As the development of the digital yuan project progresses, the number of China’s largest companies testing the national cryptocurrency is rapidly growing.

Despite the global economic crisis and the consequences of the coronavirus pandemic, the development of the Chinese national cryptocurrency, the Digital Currency Electronic Payment, is steadily progressing. The increase in the number of large companies joining the digital yuan initiative as partners in testing and implementing the technology is clear evidence of the progress the project is making in its development. 

Meituan Dianping, the country’s largest wholesale and delivery platform for products, has become the latest corporation to agree to assist the People’s Bank of China in testing and implementing the initiative. The platform currently has almost 450 million customers and about 6 million companies using it to sell their products.

Earlier, DiDi Chuxing, the Chinese Uber counterpart with a client base of about 550 million, and streaming platform Bilibili, which is used by more than 170 million, also joined the testing of China’s national digital currency. Additionally, Simon Li, founding partner of Chain Capital, revealed to Cointelegraph that DiDi will become the world’s first private enterprise to accept central bank digital currency payments.

What is in it for these companies?

The People’s Bank of China started selecting the first merchants for testing the DCEP back in April. As reported by Cointelegraph, the list supposedly included mainly retail companies, especially food and beverage ones such as Starbucks and McDonald’s.

The choice behind entities such as DiDi, Bilibili and Meituan Dianping can be explained by the fact that their users make transactions worth several billion dollars daily. Such volumes can significantly accelerate the popularization, and hence the adoption, of a digital yuan.

The total number of customers of the three services combined is over 1 billion people located not only in China but also in Australia and several countries in South America, according to statistics provided by the companies. If such a global approach is realized, the DCEP could gain access in test mode to a vast segment of users, among which are representatives of large companies in the world of finance. As a result, the DCEP has exceptional chances of being popularized in a reasonable amount of time.

Additionally, the aforementioned companies will gain a significant competitive advantage by becoming the first to introduce such a new technology into their products. As infrastructures with a large flow of daily transactions, the companies will make use of facilitating remittances in a more reliable, cheaper, faster fashion. Experiments have shown that while it usually takes about 45 days to complete a full cycle of letters of credit with the participation of the banks of buyers and sellers in different countries, using blockchain can reduce the process to just one or two days.

Testing well underway

It is as of yet unclear how long the testing period of the digital yuan will last. However, given that the number of China’s largest companies that are getting involved with the technology is growing rapidly, it is safe to assume that the first phase of testing is underway.

According to available information, testing of the DCEP is already being conducted in four cities: Shenzhen, Suzhou, Chengdu and Xiong’an. The goal is to test for theoretical reliability, system stability, functional availability, process convenience, scenario applicability and risk management. This is also the first time that regulatory authorities have confirmed the dynamics of the transitional digital currency pilot project, as Jianing Yu, president of Huobi University explained.

Earlier, four state-owned banks as well as a number of large companies, including Huawei and telecommunications giants China Telecom, China Mobile and China Unicom, all joined the testing phase. In April, the Agricultural Bank of China also confirmed its participation in the pilot project. However, it may still be far from completing testing, as Yu noted in a conversation with Cointelegraph:

“We should see that these current tests are actually still in the research stage, not preparing for immediate launch. Besides, according to the latest report, Didi, Meituan, Bilibili and some other Internet companies have partnered with a list of companies and banks to test DC/EP. Meituan and Didi will explore the application of digital currency on the smart transport platform. Bilibili’s cooperation has started the technology development stage.”

Are WeChat and Alipay off the list?

In total, more than 20 companies are involved in the digital yuan project to date. It is notable, however, that Alipay and WeChat Pay — the largest payment systems in China — are not on the list of participants, according to the information available to the public.

The South China Morning Post recently suggested that China is launching the digital yuan as an alternative to Alipay and WeChat Pay. Given that these peer-to-peer payment systems control about 90% of China’s digital payments market and exceed Mastercard and Visa combined, it will be interesting to see if they will play a part in the launch of the CBDC system. The question being posed by most analysts is whether WeChat and Alipay will become the main providers of digital yuan services, or whether they are aiming to compete with the CBDC.

According to Jeff Chu, founding partner of BN Capital, Beijing is not looking to replace Alipay and WeChat Pay with the DCEP; rather, the companies are likely to be integrated into the DCEP, as he told Cointelegraph:

“The popularization of P2P payment is now gradually increasing, and the usage scenarios have changed from simple transaction payment scenarios to areas such as life travel, entertainment, medical health, and insurance. That kind of peer-to-peer electronic payment software has become an essential tool for payment scenarios in China. We have reason to believe that the relationship between CBDC and WeChat and Alipay will be more of cooperation than competition.”

Even though 90% of contactless payments are made through digital platforms in China, the national cryptocurrency can offer the financial market elements that are lacking in modern electronic payments. In a conversation with Cointelegraph, Yu dwelled upon the problems that the DCEP may solve:

“First, the cost of cash circulation is too high to track, there is a risk for money laundering. Second, current electronic payment in existing bank accounts is based on the tight coupling, which often causes leakage of personal privacy information, and it cannot meet the public’s demand for anonymous payment.”

Among other aspects, Yu noted that China’s payment platforms such as WeChat Pay and Alipay only cover a part of all transaction scenarios, such as customer-to-customer transfers and small payments in the customer-to-business sector, for example. However, scenarios such as business-to-customer salary payments and business-to-business transaction settlements cannot be facilitated by the currently available mobile payment systems. Users that have other needs may have to choose between WeChat and Alipay, or the CBDC. Yu assumed that in the short term, the DCEP and third-party payment platforms may coexist. However, in the long run, they will gradually merge into a single system.

Given that China is seeking to fully digitize its financial industry, Alipay and WeChat Pay may get even more popular as the payment systems of choice after the DCEP starts replacing cash payments. Over time, the two platforms can also become vital instruments for the government in accelerating China’s transformation into a cashless economy. According to another scenario, Alipay and WeChat Pay might serve as providers for digital yuan services. Chain Capital’s Li told Cointelegraph:

“Although neither Ali nor Tencent participated in the research and development work of DCEP, DCEP will have an impact on WeChat and payment. In the future, Alipay and WeChat Pay will play the role of channel or scenario providers, namely platform functions such as booking air tickets, hotel, shopping and so on.”

Considering that both Alibaba — the creator of Alipay — and Tencent —the creator of WeChat — have previously worked on blockchain-related initiatives with provincial governments and also at the national level, they are not likely to disregard the adoption of the DCEP. Musheer Ahmed, managing director of FinStep Asia — an advisory firm assisting financial technology startups — is confident that the two will become major platforms for the adoption of the digital yuan at the local level, given the scale of their use in China, telling Cointelegraph:

“The two techfins are an important and integral part of the payment ecosystem. I expect that they will also be a major part of the usage of digital yuan locally. With the digital yuan also playing the role of further enabling cross-border usage of the currency, both of these firms, especially Alibaba, will be a major facilitator for ecommerce on the OBOR countries/Digital Silk Road.” 

The merger can be questioned

It may be too early to look into the future to see how cooperation between the government and the large companies may shape out given how young blockchain technology and the regulatory aspects surround it are. It is also unclear whether blockchain, which is partially used by the DCEP, will be able to work on par with electronic systems with a load of billions of transactions per day.

Speaking to Cointelegraph, Olinga Taeed, a council member and expert advisor of the China E-Commerce Blockchain Committee, provided extensive thoughts on why full-scale cooperation between WeChat, Alipay and the DCEP might be called into question, even though WeChat owner Tencent is providing its Meituan Dianping platform to pilot the CBDC:

“Whilst AliPay and WeChat pay are moving towards ’blockchain-esque’ transaction protocols they currently consider them as unsuitable for the volume they have to manage. Bitcoin, for example, currently has a transaction speed of approximately 3 per second, but AliPay is at around 300,000 per second with scalability of over a million destined before year end.”

Taeed also added that blockchain protocols and architecture are unsuitable, but fifth-generation payment systems such as AeMoney, which was created by former AliPay chief technology officer Hu Yan, are moving toward implementing a peer-to-peer system but scoff at blockchain as a viable solution.

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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March 11, 2024

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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6 hours ago

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March 11, 2024

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

“Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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9 hours ago

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March 10, 2024

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act. 

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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