China boasts the largest fintech ecosystem in the world having a penetration rate of 87% and a total transaction volume of $51.8 trillion via mobile payments only (three times the country’s GDP). The country is setting strong examples for the rest of the world to follow as it continues to develop cashless innovation systems positing road maps and processes for a shared digital currency future.
The largely cashless economy is fundamentally changing the very nature of money as it emerges as the world's financial technology leader.
How are they doing that?
For an exclusive episode unpacking the FinTech infrastructure of China and its growing dominance in the world of tech-driven financial services, we sat down with one of the leading experts in FinTech and Innovations, Rich Turrin.(@richardturrin) Rich is the author of the best-selling books Cashless: China's Digital Currency Revolution (https://www.amazon.com/Cashless-Chinas-Digital-Currency-Revolution/dp/1949642720) and Innovation Lab Excellence. (https://www.amazon.com/Innovation-Lab-Excellence-Digital-Transformation-ebook/dp/B07PMF4YFL) He is an award-winning fintech innovation expert previously heading fintech teams at IBM, following a twenty-year career heading trading teams at global investment banks where he spent a large part of his career in Shanghai witnessing China's cashless revolution upfront.
In the episode we deep-dive into:
-the design and innovation processes that set up the Chinese FinTech infrastructure
-the core reasons behind the massive adaptation of cashless payment systems in China
-how the country incentivized its private tech firms to develop and encourage large scale FinTech solutions by provisioning banking licenses for them
- comparison of NFC payment systems (Square, ApplePay, etc) vs Chinese payment rails (like Alipay)
- QR codes as a tool for widespread fintech adoption in China
-how China's central bank digital currency (CBDC) can transform and replace standard payment systems like SWIFT
-how CBDC differs from ETH/BTC
-how and why the west is falling behind when it comes to fintech
-the rise of CBDCs and policy implications for the Emerging Market countries
Follow our host Waheed Rahman (@iwaheedo) for more updates on tech, civilizational growth, progress studies, and emerging markets.
Here are the timestamps for the episode. On some podcast players, you should be able to click the timestamp for the episode.
(00:00) - Intro
(03:22) - Rich's journey to writing "Cashless: China's Digital Currency Revolution
(05:17) - Key differences between the Chinese society and the American society
(07:51) - Why has the West fallen behind in terms of major fintech adaption vs China?
(11:17) - What is the reason behind the rapid FinTech adoption in China? What makes the Chinese FinTech so special?
(15:56) - What is Central Bank Digital Currency (CBDC)? Why should we care about it?
(21:28) - Emergence of the early cashless payment systems (QR codes, NFC, etc.)
(27:36) - Advantages of having CBDCs compared to the contemporary FinTech payment solutions (Ali Pay, WeChat pay, Apple pay, etc.)
(34:48) - Crypto maximalist viewpoint vs CBDC
(36:00) - Disadvantages to having CBDC
(38:58) - How would CBDCs change/replace the current money transfer system platform such as SWIFT?
(50:36) - Impacts on western policies
(53:24) - When will CBDCs get launched? What stage is it in right now?
(56:03) - How is China breaking the tech industry?
(59:42) - How should policymakers in Emerging/Frontier markets think about CBDCs?
Music used in this episode: Reverie Millenary | by PoKeR、李大白k
(A tune inspired by one of the most famed female figures of ancient China, Empress Wu Zetian. it tells the story of an educated young lady employed in the palace for her academic talents. Through a variety of circumstances and political struggles, she eventually found her way up to the top as the Emperor of Tang Dynasty China, where her talents ushered the ancient kingdom into a golden era of economic momentum.)
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