Cornell University’s professor says CBDC is pretty weak in China

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Professor Prasad shared his stance on the Central Bank Digital Currency (CBDCs) of China and said that adoption is pretty weak in China. 

In the past, China launched its Chinese CBDCs and also banned all crypto industry-related activities from the country. Day by day, Chinese authorities are doing their best to bring the use and adoption of the Chinese CBDCs to the next level, and also they are getting better success, as per reports. 

Eswar Prasad, professor of international trade and economics, appeared in an interview with CNBC. In the interview, the Professor shared his point of view on the adoption of Chinese CBDCs. 

According to Eswar, the Chinese central bank wants to establish a trust to their citizens that payments with the Chinese CBDCs, e-CNY, are not under the centralization of two firms. 

Eswar asserted that Chinese CBDCs are weak in terms of adoption. He further continues:

“The PBOC wants to make sure that a digital version of Yuan is relevant in terms of making sure central bank money remains attractable at the retail level and also to make sure that payment space is not dominated by two major payment providers. But the use case for a CBDC is pretty weak in China.”

Further, Professor asserted that in a big fund deal there exists a tension between the two parties, no matter whether CBDCs are needed or not at that level. 

When the professor was questioned why China is pushing CBDCs adoption in the country, while Chinese CBDCs use case chances are lower. The Professor said:

“I think the reality is that you have very little competition in that space because of these two big providers is worrying. It’s also worrying for the Chinese government because these two companies and the conglomerates that sit behind them control massive troves of data which until recently they were reluctant to share with the government.”

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