The deployment of China’s digital yuan could spend the end for the nation’s ATMs, per a new report – with digital finance marginalizing hole-in-the wall-based technology.
As announced by Chinese media outlet Huo Long Guo Cai Jing, the ATM industry was at its peak in 2015, when some 252,000 machines were installed nationwide.
However, since 2017, ATMs have been in decline in the Middle Kingdom.
Instead of deploying out more conventional ATMs, banks and ATM operators are instead looking to revamp older models or replace them with “smart” terminals that will be compatible with digital yuan transactions.
The media outlet claimed that a digital yuan-compatible “ATM system transformation project has already begun.”
However, it could cost as much as USD 11bn to update all of China’s ATMs, a fee that could make the process too cost-ineffective even to consider embarking on.
Just recently this year, ATM market leader Guangdian Express reported that it had been involved in research and development projects in conjunction with the central People’s Bank of China led the digital currency research team, and was also looking into hardware wallet technology. The same firm has also developed its blockchain technology solutions, and is working with several other government organs.
Nevertheless, with Tencent’s WeChat Pay and Alibaba’s Alipay e-pay platforms already accounting for a combined 15% of payments and money transfer in China, the digital yuan – which may remove much of the need for ATM-based finance – could well give the ATM industry another battering.
Crypto acceptance is also high in China, even though crypto exchanges remain illegal in the Middle Kingdom. Over-the-counter crypto trading continues to boom in China, and bitcoin (BTC) and altcoins remain a popular choice for the nation’s middle classes – another factor that could yet further marginalize ATM-based finance.