But while the West is also considering scrapping cash, China has ruled out this in the long term.
The People’s Bank of China, which acts as the country’s central bank, said on Tuesday that it would initiate proceedings and, if necessary, punish those institutions and persons who refuse to accept valid banknotes and coins. The Chinese newspaper China Daily reported. The central fiscal authority of the People’s Republic affirmed that it would work to protect groups and individuals who find it difficult to use electronic or other modern payment methods.
It is also a measure to ensure that cash continues to circulate and is protected by state laws – despite the trend towards cashless payments. In the long term, cash in its various forms would coexist with electronic forms of payment and the central bank’s digital currency, an anonymous representative of the Volksbank told China Daily.
The background to the measure is apparently that incidents of cash refusals have increased in the course of the corona crisis. The provision of some public services would therefore have to be digital. But some groups, explicitly named senior citizens, would have problems with this development, said the central bank officer.
The central bank said Tuesday that cash is the basic form of payment in China, and therefore institutions and individuals should not refuse to accept cash. In a separate communication, the central bank stated:
“The innovation of consumption and payment methods should help (…) defend people’s livelihoods and promote public happiness.”
China is a pioneer in cashless payments and digital currency. In recent years, electronic forms of payment – such as barcodes or apps like Alipay – have spread rapidly, thanks in part to the central government’s support for innovation, as reported by the Reuters news agency.