China’s Respected University’s Digital Fiat Currency Trial Program Triggers Tension in the Country
Chinese university, Tsinghua University recently launched a digital fiat currency trial program. The efforts are made by those within the university’s Department of Computer Science as well as China UnionPay and Aershan Financial Technology.
As for the trial program, it will be first tested as a school trial where the digital asset application will be used to process payments at the school’s cafeteria. The digital wallet comprises the necessary QR code to process said payments once users have assigned a bank card. Other features on the digital wallet includes a cash balance amount.
The wallet is supposedly backed by Aershan Financial Technology, who has since stressed that digital currency is nothing more than a “digital version of money”, which will be paired against China’s RMB on a one to one ratio.
Sounds like a normal digital wallet doesn’t it? Turns out, there’s more hidden in the dark than one would assume. According to the claims made, the trial program has since sparked outrage in China. Two problems have since come up, which include:
- The digital currency’s name being “Central Bank Digital Currency” (CBDC)
- Aershan Financial Technology is unlicensed
The first might not seem like a problem at first, but the fact that the currency has the name “Central Bank” in it automatically fuels assumptions that the bank might be involved. Given China’s rather strict outlook on cryptocurrencies, seeing a supposed involvement of the bank might induce confidence in investors. This, however, has since been clarified, disclosing that the bank is neither responsible nor participated in the trial runs.
The second is the bigger problem to consider, as a firm that fails to hold the necessary licenses implies that they cannot launch a digital fiat currency. For these two reasons, it has been revealed that the program has since been cancelled. Other factors that went into arriving to this decision include probable risk and legal issues that might arise.