China’s central bank digital currency (CBDC) doesn’t carry merchant fees. If shops can process payments for free, you’d expect that would be an advantage for the digital renminbi (RMB) versus WeChat Pay and Alipay. Not so.
For every transaction that uses the CBDC, reportedly point of sale (POS) equipment manufacturers will lose their cut of the fees from other payment methods. Hence there’s a disincentive for them to adapt existing POS equipment to support the digital RMB. The result is a shortage of POS equipment that supports the CBDC.
Berkshire Hathaway’s Charlie Munger famously said: “Show me the incentive and I will show you the outcome.”
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
