In December, the People’s Bank of China (PBOC) issued a guideline (link in Chinese) regulating the use of cash for a variety of organizations, including public institutions, financial institutions, and small businesses…
But in November, the guideline was accompanied by increased monitoring of entities rejecting cash payments in daily transactions. In the fourth quarter of 2020, the PBOC penalized 15 companies and one public institution, along with the individuals responsible for rejecting cash payments.
The rapid growth of fintech companies and consumers’ enthusiastic embrace of new technology has made China one of the world’s top countries in terms of adoption of digital payments.
Transactions made through third-party mobile payment platforms reached 59.8 trillion yuan in the second quarter of 2020, up 8.8% year-on-year, according to a report (link in Chinese) from iResearch Consulting Group.
In fact, the PBOC will solve this contradiction: fight against cash but punishing companies refusing cash. A potential new entrant into the payments market, the central bank’s own digital currency, known as Digital Currency Electronic Payment (DCEP) (数字货币和电子支付), could provide an added challenge for the authorities in maintaining the role of cash and banknotes in economic activity…