‘China’s Digital Yuan Has Failed, and Has Weakened Xi’ – Report

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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November 25, 2024

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A media outlet has claimed that China’s digital yuan project has “failed,” calling this “a sign” of President Xi Jinping’s “weakening power.”

The report was published in the Epoch Times, a US-based Chinese-language newspaper affiliated with the Falun Gong movement.

The media outlet is typically highly critical of the Chinese Communist Party and is banned in mainland China.

Beijing’s CBDC plans took a hit earlier this month when the digital yuan’s one-time mastermind Yao Qiao was kicked out of the CCP and accused of using crypto bribes.

Yao was also accused of making under-the-table deals with tech firms.

Digital Yuan Has Failed, Media Outlet Claims

Yao is the former head of the Science and Technology Supervision Department of the China Securities Regulatory Commission.

The media outlet noted that Xi Jinping has promoted the digital yuan project “vigorously” ever since he came to power.

But that project has now “basically failed,” it reported, with the downfall of Yao, who it claimed “is the person who knows the most about digital currency in China.”

The outlet speculated that there may be “people behind the scenes” in Beijing “who don’t want the project to continue.”

Yao is also the former director of the Digital Currency Research Institute and has worked on digital yuan adoption projects since 2014.

Beijing has never put an exact date on its CBDC launch. But it has promoted the coin at several high-profile international events.

It has also expanded its initial pilot zone to encompass much of the mainland, as well as Hong Kong.

CBDC News Slowdown?

This year, however, has seen something of a slowdown in news related to digital yuan developments.

Epoch Times claimed it was significant that The Paper, a mainland Chinese newspaper run by the state-owned Shanghai United Media Group, last year published an article entitled: “The digital yuan has been promoted for four years. So why are so few people using it?”

An “internet celebrity” also ran a poll on X that found “90% of respondents had never seen or used the digital yuan.”

Epoch Times claimed that the digital yuan has instead “become one of Xi Jinping’s many unfinished projects.”

The media outlet claimed that Beijing’s official line on the token appears to have “changed,” writing:

“Previously, [Beijing claimed] the digital yuan would change people’s lives. But now it claims the digital yuan is a supplement to the existing payment system. Isn’t this an admission of failure?”

One of the publication’s regular contributors claimed that “Yao Qian’s fall” “basically means that the digital yuan project has failed.”

Shanghai Pushes Ahead with Adoption

However, while Yao’s dismissal may be a setback and it appears true that digital yuan-related developments are coming slower than was previously the case, not everyone appears ready to sound the CBDC’s death knell.

China’s regions are still trying to adopt the coin, albeit at an apparently slower pace than before.

On November 25, China Securities reported that the Shanghai Municipal Government has recently approached a new round of CBDC adoption measures.

This follows a similar announcement from Fuzhou, which this month green-lighted new plans to use the digital yuan in project financing.

BRICS Lifeline?

The BRICS expansion and a recent summit in Russia’s Kazan may also see new doors open for the digital yuan.

BRICS leaders made several key financial cooperation decisions in Kazan, including an agreement to use a shared CBDC system to support cross-border payments.

In October, the CCP’s English-language newspaper China Daily published a column from a contributor who claimed:

“BRICS is one of the best possible areas for China to start internationalizing its digital yuan, alongside the Belt and Road Initiative and the Regional Comprehensive Economic Partnership, without neglecting the important role that Hong Kong can play.”

Beijing’s ally Moscow is also planning to launch its own digital fiat, the digital ruble, sometime in 2025.

Top Russian lawmakers have claimed that the Russian CBDC could be “compatible” with the digital yuan and other BRICS digital fiats.