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China’s sovereign digital currency is still in the testing phase, but has caused speculation about what effect it will have on fintech. Some experts have asserted that the digital currency will crowd out payment methods WeChat Pay and Alipay. Others have stated that China’s sovereign digital currency will boost the fintech industry overall since it is electronic. So, how can we reasonably predict will the effect of the digital currency will be on China’s fintech industry?
First, we look at payment methods WeChat Pay and Alipay. China is already becoming an increasingly cashless society, one in which four out of five payments are cashless. Use of the digital currency will further this trend. The digital currency will be usable through WeChat Pay and Alipay and other digital payment methods, and regulators have stated that the sovereign digital currency is not meant to replace these payment channels. However, because the use of the sovereign digital currency neces