President of Unionpay Anxious About the Rise of Bitcoin

18th May Beijing-A report by the 21st Century Economic Report reveals that Shi Wenchao, the President of China UnionPay, is very anxious about the rise of Bitcoin. The reason is that he doesn’t know when the Bitcoin technology or relevant product would deliver lethal blow to payment processors like UnionPay, VISA or other institutes. Meanwhile, Li Yang, Chairman of the National Finance and Development Laboratory and committee member of the Chinese Academy of Social Sciences, says that the rise of bitcoin is abnormal. They express their concern on the release meeting of China Payment and Settlement Industry  Report 2017 by the Payment and Clearing Association Of China (PCAC).
According to the statistics in the Report, the industry handled a total of 125.111 billion non-cash payment throughout the country in 2016, total value of which amounts to 368.724 trillion yuan, an increase of 32.64% and 6.91%. From the global perspective, China’s non-cash payment in 2015 accounted for 22.12% of the global total, the growth ratio is four times faster than the global average.

Release of China Payment and Clearing Industry Report in 2017. Photo Credit:PCAC

China seems to be taking the lead in becoming a cashless society while dwarfing by Japan and Korea in terms of Bitcoin trading.

“A very deep understanding in our recent works is that innovation in payment industry is often driven by communities that are cross-border and on the edge.”

Shi Wenchao says on the meeting.

“Institutional investors are stepping in on a large scale”

Shi says that the recent rise of Bitcoin is a sign of people and resources that used to be outside the community are getting involved. The innovations from these communities have brought much vitality to the payment industry. But he, as the master of the industry, is very anxious as he doesn’t know when some technology or products from these communities would bring lethal impact to UnionPay and Visa. He is also not sure about how the technology would impact the existing centralized system. People starts investing in Bitcoin, which is a process that community ideology evolves into social ideology.

“I do not invest in Bitcoin, but Bitcoin is worth studying.”

Li Yang, chairman of the National Finance and Development Laboratory and committee member of the Chinese Academy of Social Sciences, says that Bitcoin is not a “currency” – not money. Because a currency needs to meet a few conditions, one is the stable value as other products rely on its pricing. One thing is difficult to become a value benchmark if its value is volatile. Secondly, the money supply shall increase with economic development while Bitcoin is limited in supply. From this point of view, Bitcoin is only an asset.

I think there are a lot of abnormal factors in the rise of Bitcoin. Bitcoin is not qualified as currency due to the lack of above requisites. “

Li Yang said.

The experts opinion are refuted by many netizens in China. Below are some comments on WSJ CN’s weibo:

Actually Bitcoin has all the characteris of a currency, only difference is that it is not backed by any sovereignty.

Root cause for Bitcoin rise is the loss of faith in fiats.

Paper notes are not trust worthy. Keep on printing and devaluation.

Such comments are rare in the past. Some hardcore bitcoiners in China are happy to see the shift change of wind and consider Bitcoin and its ideology behind are being accepted by common pubic.

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