If these Chinese leapfrog technologies gain an international following, they could make it very difficult for the West to enforce sanctions on bad actors, as former Treasury official Justin Muzinich and others have pointed out. While the stated goal of the digital yuan is financial inclusion to help those Chinese without bank accounts, the currency’s centralized nature allows the Chinese government to monitor every transaction and restrict access if the Chinese citizen has a low score on the country’s social credit system. The digital yuan is a centralized currency supported by the full faith and credit of the Chinese government, versus traditional cryptocurrency, which is speculative. In addition to these Chinese private sector innovations, the Chinese government has also developed the world’s most advanced central bank digital coin and has completed over 70 million transactions - totaling over $5 billion in revenue - since it was launched earlier this year.
In aggregate, the $45 trillion in mobile transactions volume that Chinese merchants process annually is twice as large as what MasterCard, Visa and PayPal process each year combined. For example, Alipay has over 1.3 billion users and more customers outside of China than all of PayPal’s user base. Ant Financial, AliPay, WeChat Pay and others comprise the world’s most advanced mobile payments market. In the meantime, China has taken the global lead in mobile payments, both in sophistication and scale. companies - who don’t want to operate in a “Wild West” environment - have been asking for but not receiving. Reasonable and clear regulation is exactly what responsible U.S. Second, if the West leads in fintech, it can set reasonable world standards for this new field, such as protecting the environment, preventing illicit cross-border transactions and safeguarding consumer privacy. Read more from the TechCrunch Global Affairs Project
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