Episode 9: China's Fintech Infrastructure deep-dive. Why experts think it's atleast a decade ahead of the West.
I'm joined by the man who's best-selling book on China was #1 on Amazon throughout the year of the pandemic in 2020.
In 2010, this tech-junkie investment banker left his high-octane job in the heart of the US capital markets at NYC and showed up in Shanghai with a duffle bag. He never returned.
In an exhilarating adventure, all the way from leading IBM’s Southeast Asia’s Fintech division to writing a best-selling book on China’s fintech infrastructure, Rich Turrin comes to the Innovation Civilization Podcast to talk to me about his thinking: the west is falling behind China in fintech & a new world economic order is on the horizon (with a way to by-pass the SWIFT coming soon).
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.
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
You can listen to it by clicking on your favorite podcast platform of choice as below:
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?
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