By Alexander Zaitchik, Jeanhee Kim, Kelly Le and Angie Lau, Forkast.News. Third in a series produced by Forkast.News with support from the Judith Neilson Institute’s Asian Stories project. Read part I here and part II here.
John Chen (a pseudonym used upon request) has viewed the rise of the cashless economy on a split screen.
On one side, the China of his birth, a place where paper fiat has all but gone extinct even in far-flung villages. On the other, the U.S. state of California where he attended high school and now majors in computer science at a state university, and where paper currency remains common.
Raised in Fujian to tech-entrepreneurial parents, Chen is in many ways a quintessential modern Chinese. With a comparative eye he has been following the development of his country’s unique consumer culture for half a decade. “When I visited China in 2016, I was like, ‘Wow,’ everyone is using WeChat Pay and Alipay. Nobody had a purse or a wallet.” Businesses requested he pay digitally, which he much prefers to using credit cards. “Personally, I don’t like [carrying a wallet] because I’ve already lost my wallet three times in five years,” he said, most recently during the height of COVID-19 restrictions in the U.S. Without cash, credit cards or his driver’s license, he had to ask a friend to lend him money and drive him to Target “so I could grab some chicken for dinner.”
Now back in the East taking remote classes, Chen will have a front-row seat for the next stage of China’s evolution. Beijing is widely expected to launch its central bank digital currency (CBDC) at the Winter Olympics in February.
Unlike AliPay and WeChat Pay, however, the digital yuan gives Chen pause. His reasons offer a preview of debates that will only grow with the rise of all CBDCs in the coming years.
“I’m concerned because I feel like [government officials] would be able to see all my transaction details,” said Chen. “I would lose part of my privacy and I don’t think I would be 100% happy with that.”