<p>Xu (<span>2022</span>) contains a wide range of information regarding e-CNY, which facilitates our understanding of the project with concise explanation. It also covers most of the important issues on a central bank digital currency (CBDC) including the relationship between the public and private sectors, the roles of banks and nonbanks, the impacts of CBDC on the domestic and international financial systems, and anonymity and privacy issues.</p><p>Appreciating the overall structure of the paper, I have a few comments. First, one feature of e-CNY, which has implications for the financial and monetary system, is the limits on the amount of holdings and the value per transaction. These limits are designed to avoid an abrupt shift from commercial bank deposits to the CBDC. Xu's section 2 discusses the possibility of the unbundling of banking businesses into deposits, payments, and loans. In this context, the impacts of a CBDC could be different depending on its design choices, most importantly the holding/transaction limits, and the degree of public acceptance that result. Xu also discusses the impacts of e-CNY on money. As discussed rightly, a CBDC will affect M0, M1, and M2, and again, the impacts will depend on the design choices. Therefore, this point might be worth mentioning in Xu's paper.</p><p>Secondly and related to the first point, Xu speculates that the future banking business may be quite different from that in the past. This may be the case, but the issue is what will cause such changes. Xu points out various factors including the easier access to mutual funds by consumers, the greater use of nonbank payment services, and the wider use of data of fund-flows. These factors are, and will be, caused by digitalization itself, rather than by the introduction of a CBDC. It might be useful to elaborate the explanation in section 2 by distinguishing the impact of the general trend of digitalization in finance and that of the introduction of a CBDC.</p><p>Thirdly in relation to the legal tender status of e-CNY, Xu writes that “people cannot refuse to accept e-CNY as long as they have the facilities.” If merchants have the facilities, they will not refuse it. However, in many jurisdictions, the legal tender status is not enough to enforce them to use such form of a currency in a particular transaction. Merchants can always say they do not want to sell their goods to a customer with e-CNY or any payment instruments, based on the principle of freedom of contract. While I am a stranger to Chinese laws, I have heard that some merchants do refuse to sell their goods for paper CNY which has the status of being legal tender. While legal tender status will be an important advantage to private digital money, it is not perfect. In order to be accepted widely, a CBDC would need to have features that make people feel willing to use it, including being user-friendly.</p><p>In the current version of his paper, Xu explains the proposed design of the e-CNY mo
{"title":"Comment on “Developments and Implications of Central Bank Digital Currency: The Case of China e-CNY”","authors":"Shinichi Uchida","doi":"10.1111/aepr.12381","DOIUrl":"10.1111/aepr.12381","url":null,"abstract":"<p>Xu (<span>2022</span>) contains a wide range of information regarding e-CNY, which facilitates our understanding of the project with concise explanation. It also covers most of the important issues on a central bank digital currency (CBDC) including the relationship between the public and private sectors, the roles of banks and nonbanks, the impacts of CBDC on the domestic and international financial systems, and anonymity and privacy issues.</p><p>Appreciating the overall structure of the paper, I have a few comments. First, one feature of e-CNY, which has implications for the financial and monetary system, is the limits on the amount of holdings and the value per transaction. These limits are designed to avoid an abrupt shift from commercial bank deposits to the CBDC. Xu's section 2 discusses the possibility of the unbundling of banking businesses into deposits, payments, and loans. In this context, the impacts of a CBDC could be different depending on its design choices, most importantly the holding/transaction limits, and the degree of public acceptance that result. Xu also discusses the impacts of e-CNY on money. As discussed rightly, a CBDC will affect M0, M1, and M2, and again, the impacts will depend on the design choices. Therefore, this point might be worth mentioning in Xu's paper.</p><p>Secondly and related to the first point, Xu speculates that the future banking business may be quite different from that in the past. This may be the case, but the issue is what will cause such changes. Xu points out various factors including the easier access to mutual funds by consumers, the greater use of nonbank payment services, and the wider use of data of fund-flows. These factors are, and will be, caused by digitalization itself, rather than by the introduction of a CBDC. It might be useful to elaborate the explanation in section 2 by distinguishing the impact of the general trend of digitalization in finance and that of the introduction of a CBDC.</p><p>Thirdly in relation to the legal tender status of e-CNY, Xu writes that “people cannot refuse to accept e-CNY as long as they have the facilities.” If merchants have the facilities, they will not refuse it. However, in many jurisdictions, the legal tender status is not enough to enforce them to use such form of a currency in a particular transaction. Merchants can always say they do not want to sell their goods to a customer with e-CNY or any payment instruments, based on the principle of freedom of contract. While I am a stranger to Chinese laws, I have heard that some merchants do refuse to sell their goods for paper CNY which has the status of being legal tender. While legal tender status will be an important advantage to private digital money, it is not perfect. In order to be accepted widely, a CBDC would need to have features that make people feel willing to use it, including being user-friendly.</p><p>In the current version of his paper, Xu explains the proposed design of the e-CNY mo","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"253-254"},"PeriodicalIF":3.9,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12381","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89411793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Xu (<span>2022</span>) provides an overview of the structure and purpose of China's e-CNY and also discusses its implications for the international monetary system. In this comment, I will expand on some of the points in Xu's paper, drawing on Prasad (<span>2021</span>) and a forthcoming Hoover Institution report (Duffie <i>et al</i>., <span>2022</span>) that examines the implications of the e-CNY for US policy and geopolitical influence (I am a member of the working group).</p><p>The renminbi has become the fifth most important currency in international payments (based on SWIFT data). In 2016, the International Monetary Fund (IMF) included the renminbi in an elite basket of currencies that comprise the Special Drawing Rights, making it an official reserve currency. Since then, the renminbi's progress has stalled. The renminbi's share of international payments has fallen to about 2% and the share of global foreign exchange reserves held in renminbi-denominated assets has plateaued at about 3%.</p><p>China's rollout of the e-CNY trials makes it one of the first major economies to do so. The second phase of e-CNY trials is already underway in a number of major metropolises and with a number of financial and nonfinancial institutions participating. Will the e-CNY be a game changer that elevates the renminbi's role in international finance?</p><p>The e-CNY will initially only be usable for payments within China, although this could change over time. In my assessment, China's Cross-border Interbank Payments System (CIPS) is a more important innovation that makes it easier to use the currency for international transactions. CIPS also has messaging capabilities, which makes it possible to bypass SWIFT and could help evade US direct as well as indirect financial sanctions, a tempting prospect for many governments around the world. As the renminbi becomes more widely used, countries that have strong trade and financial links with China might start to invoice and settle their trade transactions directly in that currency. The e-CNY could eventually be linked up to the cross-border payments system, further digitizing international payments.</p><p>However, the e-CNY by itself will make little difference to the renminbi as a reserve currency. One reason is that cross-border capital flows into and out of China are subject to restrictions. Another is that the renminbi's exchange rate is still managed by China's central bank. The Chinese government has certainly reduced restrictions on capital flows and signaled its plans to eventually have an open capital account. Moreover, the central bank has committed to reducing its intervention in foreign exchange markets and letting market forces have their say.</p><p>Still, in reality, China's government has shown that, when pressures build up for significant currency moves as capital flows shift, it will revert to its command and control mentality by tightening capital controls and exchange rate management. Foreign in
{"title":"Comment on “Developments and Implications of Central Bank Digital Currency: The Case of China e-CNY”","authors":"Eswar Prasad","doi":"10.1111/aepr.12382","DOIUrl":"10.1111/aepr.12382","url":null,"abstract":"<p>Xu (<span>2022</span>) provides an overview of the structure and purpose of China's e-CNY and also discusses its implications for the international monetary system. In this comment, I will expand on some of the points in Xu's paper, drawing on Prasad (<span>2021</span>) and a forthcoming Hoover Institution report (Duffie <i>et al</i>., <span>2022</span>) that examines the implications of the e-CNY for US policy and geopolitical influence (I am a member of the working group).</p><p>The renminbi has become the fifth most important currency in international payments (based on SWIFT data). In 2016, the International Monetary Fund (IMF) included the renminbi in an elite basket of currencies that comprise the Special Drawing Rights, making it an official reserve currency. Since then, the renminbi's progress has stalled. The renminbi's share of international payments has fallen to about 2% and the share of global foreign exchange reserves held in renminbi-denominated assets has plateaued at about 3%.</p><p>China's rollout of the e-CNY trials makes it one of the first major economies to do so. The second phase of e-CNY trials is already underway in a number of major metropolises and with a number of financial and nonfinancial institutions participating. Will the e-CNY be a game changer that elevates the renminbi's role in international finance?</p><p>The e-CNY will initially only be usable for payments within China, although this could change over time. In my assessment, China's Cross-border Interbank Payments System (CIPS) is a more important innovation that makes it easier to use the currency for international transactions. CIPS also has messaging capabilities, which makes it possible to bypass SWIFT and could help evade US direct as well as indirect financial sanctions, a tempting prospect for many governments around the world. As the renminbi becomes more widely used, countries that have strong trade and financial links with China might start to invoice and settle their trade transactions directly in that currency. The e-CNY could eventually be linked up to the cross-border payments system, further digitizing international payments.</p><p>However, the e-CNY by itself will make little difference to the renminbi as a reserve currency. One reason is that cross-border capital flows into and out of China are subject to restrictions. Another is that the renminbi's exchange rate is still managed by China's central bank. The Chinese government has certainly reduced restrictions on capital flows and signaled its plans to eventually have an open capital account. Moreover, the central bank has committed to reducing its intervention in foreign exchange markets and letting market forces have their say.</p><p>Still, in reality, China's government has shown that, when pressures build up for significant currency moves as capital flows shift, it will revert to its command and control mentality by tightening capital controls and exchange rate management. Foreign in","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"251-252"},"PeriodicalIF":3.9,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12382","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76326575","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Iwashita (<span>2022</span>) argues that Japan's FinTech is underdeveloped as banks and their customers, especially the elderly and conservative corporate customers, cling to the traditional financial service formats. He further argues that the supremacy of banking services before the Internet era may have hindered changes on the supply side, that is, the service level was sufficiently convenient therefore the relevant parties did not want to expose themselves to the risks of cyberattacks and the costs of system renewals. Iwashita also mentions that the aging population may have worked against digitization due to the low digital literacy of the elderly.</p><p>Iwashita (<span>2022</span>) also touches on the possibility of near-future developments, to be prompted by the global advancements in digitalization, the supporting attitude of the Japanese government to promote technological progresses, and the changing attitudes of customers. The change of tax filing obligations expected in 2023 is also mentioned as a factor which may promote the electronification of receipts and invoices, leading to more digital payments.</p><p>I agree with most of the points presented in Iwashita (<span>2022</span>). While Japan's FinTech industry became active in around 2015,<sup>1</sup> which almost coincided with the timing of the start of FinTech activities in other parts of the world, the progress of less-cash and more-efficient financial services has been slower in Japan in comparison to her international peers since then. As Iwashita indicates, the Covid crisis has accelerated the change of attitudes of financial institutions, customers and the government in Japan.</p><p>To further deepen the analysis and enhance the value of the recommendations presented by Iwashita (<span>2022</span>), I would like to suggest following points.</p><p>First, to expand the list of possible actions by banks and the government to promote FinTech in Japan, it may be worthwhile to identify changes of the payment systems in some European countries achieving less-cash status while, like Japan, their societies are aging and their banking systems are well developed. Sweden, where cash usage has decreased in an extraordinary manner (Riksbank (Sweden), <span>2017</span>; Bach <i>et al</i>., <span>2018</span>), suggests that the central bank's actions to promote an effective cash handling system by imposing the costs on to the private sector, and technological developments to make digital methods cheaper and more convenient may have contributed to the extraordinary rapid decline of cash usage. Another analysis (Riksbank (Sweden), <span>2020</span>) offers the hypothesis that the combination of a couple of events, such as the introduction of mandatory receipt issuance for cash and the popularization of a bank-consortium-led digital payment application, made cash less attractive to digital methods. By learning from these examples, Japan may be able to build concrete action plans to promote
Iwashita(2022)认为，由于银行及其客户，特别是老年人和保守的企业客户，坚持传统的金融服务模式，日本的金融科技不发达。他进一步认为，在互联网时代之前，银行服务的霸权可能阻碍了供给侧的变化，即服务水平足够方便，因此相关方不愿意承担网络攻击的风险和系统更新的成本。Iwashita还提到，由于老年人的数字素养较低，人口老龄化可能会阻碍数字化。Iwashita(2022)还谈到了近期发展的可能性，这是由全球数字化的进步、日本政府对促进技术进步的支持态度以及客户态度的变化所推动的。预计2023年税务申报义务的变化也被认为是可能促进收据和发票电子化的一个因素，从而导致更多的数字支付。我同意岩田(2022)中提出的大部分观点。虽然日本的金融科技行业在2015年左右开始活跃，1几乎与世界其他地区的金融科技活动开始的时间一致，但自那时以来，与国际同行相比，日本的低现金和更高效的金融服务的进展一直较慢。正如Iwashita所说，新冠疫情加速了日本金融机构、客户和政府态度的转变。为了进一步深化分析，提升Iwashita(2022)提出的建议的价值，我想提出以下几点建议。首先，为了扩大银行和政府在日本推广金融科技的可能行动清单，可能值得确定一些欧洲国家实现较少现金状态的支付系统的变化，而像日本一样，他们的社会正在老龄化，他们的银行系统也很发达。瑞典，现金使用量以非同寻常的方式下降(瑞典央行，2017年);巴赫等人(Bach et al.， 2018)的研究表明，央行通过将成本强加给私营部门来促进有效现金处理系统的行动，以及使数字方法更便宜、更方便的技术发展，可能导致了现金使用量的快速下降。另一项分析(Riksbank (Sweden)， 2020)提出了这样一个假设，即一些事件的结合，例如引入强制性现金收据发行和银行-财团主导的数字支付应用的普及，使现金对数字方法的吸引力降低。通过从这些例子中学习，日本也许能够制定具体的行动计划来促进金融科技。其次，讨论数字化金融服务可能存在的风险，以及解决这些风险的方法，可能会受到赞赏，因为在推动金融科技的过程中需要考虑到负面后果。例如，日本银行提到了对私营部门驱动的无现金社会的一些担忧，例如根据安全水平或地理分布，法定货币现金支付的不完美替代，并得出结论，发行中央银行数字货币可能是解决方案(日本银行，2020)。列出金融科技服务的理想功能也可能是有用的，以减少潜在的问题，如安全性、弹性、普遍访问、即时支付能力(结算终局性)和互操作性。在结束我的评论时，我想重申岩田聪的观点，即重视“满足用户”的需求和提供更大的盈利能力。最终的目标不是推广FinTech本身，而是从用户的角度提高生产力。我相信Iwashita(2022)对现状的根本原因分析将对日本银行业在不久的将来的变化有很大的帮助。
{"title":"Comment on “Why Fintech Is Not Changing Japanese Banking”","authors":"Yuko Kawai","doi":"10.1111/aepr.12394","DOIUrl":"10.1111/aepr.12394","url":null,"abstract":"<p>Iwashita (<span>2022</span>) argues that Japan's FinTech is underdeveloped as banks and their customers, especially the elderly and conservative corporate customers, cling to the traditional financial service formats. He further argues that the supremacy of banking services before the Internet era may have hindered changes on the supply side, that is, the service level was sufficiently convenient therefore the relevant parties did not want to expose themselves to the risks of cyberattacks and the costs of system renewals. Iwashita also mentions that the aging population may have worked against digitization due to the low digital literacy of the elderly.</p><p>Iwashita (<span>2022</span>) also touches on the possibility of near-future developments, to be prompted by the global advancements in digitalization, the supporting attitude of the Japanese government to promote technological progresses, and the changing attitudes of customers. The change of tax filing obligations expected in 2023 is also mentioned as a factor which may promote the electronification of receipts and invoices, leading to more digital payments.</p><p>I agree with most of the points presented in Iwashita (<span>2022</span>). While Japan's FinTech industry became active in around 2015,<sup>1</sup> which almost coincided with the timing of the start of FinTech activities in other parts of the world, the progress of less-cash and more-efficient financial services has been slower in Japan in comparison to her international peers since then. As Iwashita indicates, the Covid crisis has accelerated the change of attitudes of financial institutions, customers and the government in Japan.</p><p>To further deepen the analysis and enhance the value of the recommendations presented by Iwashita (<span>2022</span>), I would like to suggest following points.</p><p>First, to expand the list of possible actions by banks and the government to promote FinTech in Japan, it may be worthwhile to identify changes of the payment systems in some European countries achieving less-cash status while, like Japan, their societies are aging and their banking systems are well developed. Sweden, where cash usage has decreased in an extraordinary manner (Riksbank (Sweden), <span>2017</span>; Bach <i>et al</i>., <span>2018</span>), suggests that the central bank's actions to promote an effective cash handling system by imposing the costs on to the private sector, and technological developments to make digital methods cheaper and more convenient may have contributed to the extraordinary rapid decline of cash usage. Another analysis (Riksbank (Sweden), <span>2020</span>) offers the hypothesis that the combination of a couple of events, such as the introduction of mandatory receipt issuance for cash and the popularization of a bank-consortium-led digital payment application, made cash less attractive to digital methods. By learning from these examples, Japan may be able to build concrete action plans to promote ","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"311-312"},"PeriodicalIF":3.9,"publicationDate":"2022-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12394","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89228142","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Although the term “fintech” has now filtered down into everyday language, fintech services have not yet been fully integrated into everyday life, at least in Japan. Iwashita (<span>2022</span>) overviews the current disappointing state of fintech in Japan, assesses which conditions keep fintech services from taking off, and discusses potential “game changers” that would pave the way for fintech services to gain wider acceptance in the coming decade.</p><p>Iwashita (<span>2022</span>) points out two major hindrances to which he attributes the low acceptance of fintech services in Japan; one is related to consumers' attitudes to digital devices and the other is related to corporations' readiness for digital technologies.</p><p>The first hindrance is the hesitation of older people to use digital devices such as personal computers and smartphones. Unlike the younger people who have been using such devices from their childhood, the older people still favor face-to-face communication. Given that the older retired people tend to accumulate more savings than younger working-age people, Japanese banks have an incentive to accommodate those older customers with traditional face-to-face services.</p><p>The second is the unpreparedness or unwillingness of Japanese companies to adopt new digital technologies. Iwashita's (<span>2022</span>) Table 3 compares Japan with three other developed countries (USA, UK, and Germany) in terms of business information and communication technology (ICT) tool usage, which shows that Japanese companies use ICT tools far less than the others in all respects. This does not necessarily mean that Japanese companies did nothing about information technology (IT) investment. Iwashita states that they did reasonably invest in their IT systems for financial accounting, billing, payments, and other accounting tasks, but their systems are mostly for internal use and have little interoperability with the internet. In addition, national and municipal governments face the same problem of legacy IT systems. As a result, Japanese banks need to maintain their traditional channels of financial transactions for the continuation of business relations with private companies as well as government agencies.</p><p>Iwashita (<span>2022</span>), however, claims that the inertia can be broken and fintech services will become more widely accepted in Japan for the following five reasons. First, the global expansion of digital finance. Fintech services are rapidly expanding in emerging economies, and this trend will put pressure on Japanese financial service users. Second, the digitization of government services. Japan's Digital Agency was established on September 1, 2021. It is designed to oversee the digitization of government services at both national and municipal levels, which may ease the Japanese people's fears of the internet, in general, and breaches of privacy, in particular. Third, the shifts in strategic goals of financial institutions. Nega
{"title":"Comment on “Why Fintech Is Not Changing Japanese Banking”","authors":"Teruo Nakatsuma","doi":"10.1111/aepr.12391","DOIUrl":"10.1111/aepr.12391","url":null,"abstract":"<p>Although the term “fintech” has now filtered down into everyday language, fintech services have not yet been fully integrated into everyday life, at least in Japan. Iwashita (<span>2022</span>) overviews the current disappointing state of fintech in Japan, assesses which conditions keep fintech services from taking off, and discusses potential “game changers” that would pave the way for fintech services to gain wider acceptance in the coming decade.</p><p>Iwashita (<span>2022</span>) points out two major hindrances to which he attributes the low acceptance of fintech services in Japan; one is related to consumers' attitudes to digital devices and the other is related to corporations' readiness for digital technologies.</p><p>The first hindrance is the hesitation of older people to use digital devices such as personal computers and smartphones. Unlike the younger people who have been using such devices from their childhood, the older people still favor face-to-face communication. Given that the older retired people tend to accumulate more savings than younger working-age people, Japanese banks have an incentive to accommodate those older customers with traditional face-to-face services.</p><p>The second is the unpreparedness or unwillingness of Japanese companies to adopt new digital technologies. Iwashita's (<span>2022</span>) Table 3 compares Japan with three other developed countries (USA, UK, and Germany) in terms of business information and communication technology (ICT) tool usage, which shows that Japanese companies use ICT tools far less than the others in all respects. This does not necessarily mean that Japanese companies did nothing about information technology (IT) investment. Iwashita states that they did reasonably invest in their IT systems for financial accounting, billing, payments, and other accounting tasks, but their systems are mostly for internal use and have little interoperability with the internet. In addition, national and municipal governments face the same problem of legacy IT systems. As a result, Japanese banks need to maintain their traditional channels of financial transactions for the continuation of business relations with private companies as well as government agencies.</p><p>Iwashita (<span>2022</span>), however, claims that the inertia can be broken and fintech services will become more widely accepted in Japan for the following five reasons. First, the global expansion of digital finance. Fintech services are rapidly expanding in emerging economies, and this trend will put pressure on Japanese financial service users. Second, the digitization of government services. Japan's Digital Agency was established on September 1, 2021. It is designed to oversee the digitization of government services at both national and municipal levels, which may ease the Japanese people's fears of the internet, in general, and breaches of privacy, in particular. Third, the shifts in strategic goals of financial institutions. Nega","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"313-314"},"PeriodicalIF":3.9,"publicationDate":"2022-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12391","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83041489","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Several years have passed since fintech first attracted attention in Japan. Although various new fintech services have emerged due to deregulation and policies to promote fintech's development and adoption, the overall composition and functioning of Japan's financial industry has not changed significantly despite fintech advances in other economies. The industry in Japan continues to be dominated by face-to-face interactions and has experienced little digitization. In Japan, sophisticated financial services were available before the widespread use of the internet, and most people have resisted conducting financial transactions using their smartphones. In addition, there has been almost no progress in digitizing accounting work in corporations. However, this stagnation in digitization on the demand side of financial services is changing for several reasons. Digitization in the government sector and the introduction of a new invoice system in 2023 will provide an opportunity for change. This time, Japan's financial services should undergo a significant digital transformation.
{"title":"Why Fintech Is Not Changing Japanese Banking","authors":"Naoyuki Iwashita","doi":"10.1111/aepr.12390","DOIUrl":"10.1111/aepr.12390","url":null,"abstract":"<p>Several years have passed since fintech first attracted attention in Japan. Although various new fintech services have emerged due to deregulation and policies to promote fintech's development and adoption, the overall composition and functioning of Japan's financial industry has not changed significantly despite fintech advances in other economies. The industry in Japan continues to be dominated by face-to-face interactions and has experienced little digitization. In Japan, sophisticated financial services were available before the widespread use of the internet, and most people have resisted conducting financial transactions using their smartphones. In addition, there has been almost no progress in digitizing accounting work in corporations. However, this stagnation in digitization on the demand side of financial services is changing for several reasons. Digitization in the government sector and the introduction of a new invoice system in 2023 will provide an opportunity for change. This time, Japan's financial services should undergo a significant digital transformation.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"297-310"},"PeriodicalIF":3.9,"publicationDate":"2022-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86088475","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>While the digitalization of finance is a global phenomenon, the trend is most remarkable in China, which is now home to two of the largest tech companies—big techs—in the world (Alibaba and Tencent). Against this backdrop, Chinese regulators have been confronted with the Herculean challenge to find a balance that embraces the promise of fintech while reducing potential harm to the financial system.</p><p>Chorzempa and Huang (<span>2022</span>) offer a review of the development of fintech in China and related regulatory actions. They highlight a number of yet unresolved policy issues, draw lessons from China's experience and offer some recommendations for Chinese authorities. Their paper concludes by assessing the regulatory response to fintech in China as being largely successful.</p><p>In China, to a large part, discussing fintech means discussing big techs. China is the largest market for both fintech credit and big tech credit in the world (FSB, <span>2020</span>); and two big tech firms jointly account for 94% of its mobile payments market (Carstens <i>et al</i>., <span>2021</span>). In 2018, big techs processed payments equivalent to 38% of gross domestic product (GDP) and they now have market capitalizations and credit ratings comparable to those of large banks (FSB, <span>2020</span>).</p><p>Big techs have unique business models that differ from those of fintech players. Most importantly, big techs are exploiting activities with strong network effects, under which every additional user creates value for all others (see chapter 3 in BIS, <span>2019</span>). Chui (<span>2021</span>) argues that these network effects can help explain the rise of Alibaba and Tencent, and that they ventured into financial services as a means to survive against competition, which is why he sees them as “accidental financiers” rather than “aggressive invaders”, at least during the initial stage.</p><p>Big techs' activities in financial services come with several policy challenges. Some are traditional policy concerns: financial risks, consumer protection and operational resilience; others are new challenges surrounding the concentration of market power and data governance (Carstens <i>et al</i>., <span>2021</span>). These challenges are increasingly attracting the attention of policymakers. China is one of the countries where policy initiatives have emerged to cope with the risks presented by big techs, specifically in the areas of competition, data, conduct of business, operational resilience, and financial stability (Crisanto <i>et al</i>., <span>2021a</span>).</p><p>Against this backdrop, Chorzempa and Huang review how fintech developed in China and what factors contributed to its growth. Their discussion usefully refers to the underlying economics of financial services in the context of digital innovation (Feyen <i>et al</i>., <span>2021</span>); and contrasts the Chinese experience with that of other countries. Building on this, Chorzempa and Huang provid
虽然金融数字化是一种全球现象，但这一趋势在中国最为显著，中国现在是世界上最大的两家科技公司(阿里巴巴和腾讯)的所在地。在这种背景下，中国监管机构面临着一项艰巨的挑战，即在拥抱金融科技前景的同时，减少对金融体系的潜在危害。Chorzempa和Huang(2022)对中国金融科技的发展和相关监管行动进行了回顾。他们强调了一些尚未解决的政策问题，从中国的经验中吸取了教训，并为中国当局提供了一些建议。他们的论文最后评估了中国对金融科技的监管反应在很大程度上是成功的。在中国，讨论金融科技在很大程度上意味着讨论大型科技公司。中国是全球最大的金融科技信贷和大型科技信贷市场(FSB, 2020);和两家大型科技公司共同占其移动支付市场的94% (Carstens et al.， 2021)。2018年，大型科技公司处理的支付相当于国内生产总值(GDP)的38%，它们现在的市值和信用评级与大型银行相当(FSB, 2020)。大型科技公司拥有与金融科技公司不同的独特商业模式。最重要的是，大型科技公司正在利用具有强大网络效应的活动，在这些活动中，每个额外的用户都为所有其他人创造价值(见BIS, 2019年第3章)。Chui(2021)认为，这些网络效应可以帮助解释阿里巴巴和腾讯的崛起，他们冒险进入金融服务领域是为了在竞争中生存，这就是为什么他认为他们是“偶然的金融家”，而不是“侵略性的入侵者”，至少在初始阶段是这样。大型科技公司在金融服务领域的活动面临着几项政策挑战。其中一些是传统的政策问题:金融风险、消费者保护和运营弹性;其他则是围绕市场力量集中和数据治理的新挑战(Carstens et al.， 2021)。这些挑战正日益引起政策制定者的注意。中国是已经出台政策举措来应对大型科技公司带来的风险的国家之一，特别是在竞争、数据、商业行为、运营弹性和金融稳定等领域(Crisanto等人，2021a)。在此背景下，Chorzempa和Huang回顾了金融科技在中国的发展历程，以及推动其发展的因素。他们的讨论有用地提到了数字创新背景下金融服务的潜在经济学(Feyen等人，2021);并将中国的经验与其他国家的经验进行对比。在此基础上，Chorzempa和Huang基于概念框架“金融科技树”(Ehrentraud et al.， 2020)概述了金融科技政策的发展。审查的政策领域包括支付、点对点贷款、加密货币、金融控股公司、竞争政策、数据保护和蚂蚁集团的“整改”。作为他们的主要建议之一，与Restoy(2021)和Crisanto等人(2021b)一致，Chorzempa和Huang主张更多基于实体的监管，以解决大型科技公司独特特征带来的独特风险，并减少监管套利的范围。这项建议应该得到大力支持。基于实体的方法的主要原理是，执行类似活动的不同实体产生的风险不一定相同。提供金融服务的金融科技/大型科技公司必须已经满足监管要求，这些要求原则上与对其他市场参与者施加的要求一致。但这些基于活动的规则可能还不够。在某种程度上，风险不仅来自特定服务的提供，还来自活动的组合(就像大型科技公司的情况一样)，因此需要基于实体的规则。
{"title":"Comment on “Chinese Fintech Innovation and Regulation”","authors":"Johannes Ehrentraud","doi":"10.1111/aepr.12389","DOIUrl":"10.1111/aepr.12389","url":null,"abstract":"<p>While the digitalization of finance is a global phenomenon, the trend is most remarkable in China, which is now home to two of the largest tech companies—big techs—in the world (Alibaba and Tencent). Against this backdrop, Chinese regulators have been confronted with the Herculean challenge to find a balance that embraces the promise of fintech while reducing potential harm to the financial system.</p><p>Chorzempa and Huang (<span>2022</span>) offer a review of the development of fintech in China and related regulatory actions. They highlight a number of yet unresolved policy issues, draw lessons from China's experience and offer some recommendations for Chinese authorities. Their paper concludes by assessing the regulatory response to fintech in China as being largely successful.</p><p>In China, to a large part, discussing fintech means discussing big techs. China is the largest market for both fintech credit and big tech credit in the world (FSB, <span>2020</span>); and two big tech firms jointly account for 94% of its mobile payments market (Carstens <i>et al</i>., <span>2021</span>). In 2018, big techs processed payments equivalent to 38% of gross domestic product (GDP) and they now have market capitalizations and credit ratings comparable to those of large banks (FSB, <span>2020</span>).</p><p>Big techs have unique business models that differ from those of fintech players. Most importantly, big techs are exploiting activities with strong network effects, under which every additional user creates value for all others (see chapter 3 in BIS, <span>2019</span>). Chui (<span>2021</span>) argues that these network effects can help explain the rise of Alibaba and Tencent, and that they ventured into financial services as a means to survive against competition, which is why he sees them as “accidental financiers” rather than “aggressive invaders”, at least during the initial stage.</p><p>Big techs' activities in financial services come with several policy challenges. Some are traditional policy concerns: financial risks, consumer protection and operational resilience; others are new challenges surrounding the concentration of market power and data governance (Carstens <i>et al</i>., <span>2021</span>). These challenges are increasingly attracting the attention of policymakers. China is one of the countries where policy initiatives have emerged to cope with the risks presented by big techs, specifically in the areas of competition, data, conduct of business, operational resilience, and financial stability (Crisanto <i>et al</i>., <span>2021a</span>).</p><p>Against this backdrop, Chorzempa and Huang review how fintech developed in China and what factors contributed to its growth. Their discussion usefully refers to the underlying economics of financial services in the context of digital innovation (Feyen <i>et al</i>., <span>2021</span>); and contrasts the Chinese experience with that of other countries. Building on this, Chorzempa and Huang provid","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"295-296"},"PeriodicalIF":3.9,"publicationDate":"2022-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12389","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83331306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Khera et al. (<span>2022</span>) provides a novel measurement of digital financial inclusion using a three-stage principal component approach (PCA) for 52 emerging market and developing economies. Based on this new index, they have found that the adoption of digital financial services has been a key driver of financial inclusion, and countries/regions in Africa and Asia and regions have achieved greater progress. They also warn against a digital divide and call for policies to close the gap.</p><p>The novelty of this new index rests on three characteristics: it is focused; it is comprehensive, and it utilizes the PCA approach. This index focuses on the payment aspects of financial inclusion, and considers the “access” and “usage” aspects of both digital and traditional aspects of financial inclusion. The three-stage PCA approach first extracts the supply-side and demand-side aspects of financial inclusion for both traditional and digital financial services, then extracts the principal components of the access and usage indices for the traditional and digital financial inclusion, respectively, and finally builds up a comprehensive index encompassing all these subcomponents.</p><p>The constructed index provides a good chance to measure the level of the adoption of digital financial services in a specific country, and hence provides an instrument for evaluating the policy implications of financial inclusion, especially digital financial inclusion. For example, the subindex provides a chance to evaluate the severeness of the digital divide and the risk of financial exclusion. The indices show wide variations in digital financial inclusion across countries, whether it is mainly driven by a reluctance in constructing more digital financial infrastructure due to financial constraints, or a distrust of digital technology will need further investigation.</p><p>Overall, this index has great potential for deepening our understanding of the relationships between comprehensive financial inclusion, digital financial inclusion as well as traditional financial inclusion. In this aspect, Khera et al. (<span>2022</span>) may wish to provide more discussions so that the importance of subindices can be better appreciated. For example, Khera et al.’s Figures 1 and 2 indicate that African countries excel in digital financial inclusion, so it would be insightful to explain which of the access and the usage components are relevant in promoting the development in digital financial inclusion. Another example is Khera et al.’s Figure 3 that contains the interesting finding, namely, for countries with low traditional financial inclusion, the variance of traditional financial inclusion is larger than the variance of countries with high-traditional financial inclusion. This implies that efforts in pursuing digital financial inclusion vary more in countries with low levels of traditional financial inclusion.</p><p>Some additional empirical evidences may also help to convinc
{"title":"Comment on “Measuring Digital Financial Inclusion in Emerging Market and Developing Economies: A New Index”","authors":"Yan Shen","doi":"10.1111/aepr.12387","DOIUrl":"10.1111/aepr.12387","url":null,"abstract":"<p>Khera et al. (<span>2022</span>) provides a novel measurement of digital financial inclusion using a three-stage principal component approach (PCA) for 52 emerging market and developing economies. Based on this new index, they have found that the adoption of digital financial services has been a key driver of financial inclusion, and countries/regions in Africa and Asia and regions have achieved greater progress. They also warn against a digital divide and call for policies to close the gap.</p><p>The novelty of this new index rests on three characteristics: it is focused; it is comprehensive, and it utilizes the PCA approach. This index focuses on the payment aspects of financial inclusion, and considers the “access” and “usage” aspects of both digital and traditional aspects of financial inclusion. The three-stage PCA approach first extracts the supply-side and demand-side aspects of financial inclusion for both traditional and digital financial services, then extracts the principal components of the access and usage indices for the traditional and digital financial inclusion, respectively, and finally builds up a comprehensive index encompassing all these subcomponents.</p><p>The constructed index provides a good chance to measure the level of the adoption of digital financial services in a specific country, and hence provides an instrument for evaluating the policy implications of financial inclusion, especially digital financial inclusion. For example, the subindex provides a chance to evaluate the severeness of the digital divide and the risk of financial exclusion. The indices show wide variations in digital financial inclusion across countries, whether it is mainly driven by a reluctance in constructing more digital financial infrastructure due to financial constraints, or a distrust of digital technology will need further investigation.</p><p>Overall, this index has great potential for deepening our understanding of the relationships between comprehensive financial inclusion, digital financial inclusion as well as traditional financial inclusion. In this aspect, Khera et al. (<span>2022</span>) may wish to provide more discussions so that the importance of subindices can be better appreciated. For example, Khera et al.’s Figures 1 and 2 indicate that African countries excel in digital financial inclusion, so it would be insightful to explain which of the access and the usage components are relevant in promoting the development in digital financial inclusion. Another example is Khera et al.’s Figure 3 that contains the interesting finding, namely, for countries with low traditional financial inclusion, the variance of traditional financial inclusion is larger than the variance of countries with high-traditional financial inclusion. This implies that efforts in pursuing digital financial inclusion vary more in countries with low levels of traditional financial inclusion.</p><p>Some additional empirical evidences may also help to convinc","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"231-232"},"PeriodicalIF":3.9,"publicationDate":"2022-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12387","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82322557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>Morgan (<span>2022</span>) writes an interesting and valuable survey on fintech and financial inclusion in Association of Southeast Asian Nations (ASEAN) and India. This paper is very timely and topical. It provides a good and informative description of the development of financial technology and digital payments in India and ASEAN. This paper also shows how fintech can help promote financial inclusion. Morgan argues that fintech adoption is spreading faster in higher income countries, and, within countries, it is spreading faster among higher income and more highly educated groups. In addition, Morgan points out the potential of digital payments for expanding financial inclusion. The information that Morgan provides is very useful for readers who want to know about the development of fintech in India and ASEAN. Morgan examines differences in the strategies and implementation of financial inclusion and fintech between India and ASEAN and draws lessons and policy recommendations from these findings. This paper also provides a comparative perspective on regulatory developments in several ASEAN countries and India. I agree very much with the author's analyses and findings, however, to enrich and sharpen Morgan's analysis, I suggest several things:</p><p>First, Morgan does discuss general concepts of how fintech can promote financial inclusion, but it would be more interesting for example if he could provide examples or discuss how fintech in India or ASEAN can reduce transaction costs in financial transactions.</p><p>Second, Morgan points out that despite the rapid growth of alternative finance in recent years, the overall rate of penetration is still small. It will be useful if he could elaborate on the prospects of alternative finance in the future.</p><p>Third, one of the objectives of Morgan's paper is to discuss the relationship between financial inclusion and financial stability as well as the various risks that arise from the development of this fintech. However, I found the argument is very general. I think Morgan should be more articulate and more explicit about this so that readers can see this argument clearly.</p><p>Fourth, on regulatory issue, we understand that digital innovation happens so fast, the production cycle becomes so short. Goods or services made today will become obsolete in a short period of time. So how does the government regulate it? Regulations will tend to lose ground quickly when the new technologies emerge. How can the government make regulations for one industry or one product, if the rules soon become obsolete due to new innovations. Government regulations or laws, I believe, will need to be more general and flexible in the future. The issue is that if the regulations are not explicit, how can they adequately govern them? The conundrum is that while innovation cannot be stifled, it must be protected. What is the best way to draw this line? This is a big issue that might become a potential problem in the future.
{"title":"Comments on “Fintech and Financial Inclusion in Southeast Asia and India”","authors":"M. Chatib Basri","doi":"10.1111/aepr.12386","DOIUrl":"10.1111/aepr.12386","url":null,"abstract":"<p>Morgan (<span>2022</span>) writes an interesting and valuable survey on fintech and financial inclusion in Association of Southeast Asian Nations (ASEAN) and India. This paper is very timely and topical. It provides a good and informative description of the development of financial technology and digital payments in India and ASEAN. This paper also shows how fintech can help promote financial inclusion. Morgan argues that fintech adoption is spreading faster in higher income countries, and, within countries, it is spreading faster among higher income and more highly educated groups. In addition, Morgan points out the potential of digital payments for expanding financial inclusion. The information that Morgan provides is very useful for readers who want to know about the development of fintech in India and ASEAN. Morgan examines differences in the strategies and implementation of financial inclusion and fintech between India and ASEAN and draws lessons and policy recommendations from these findings. This paper also provides a comparative perspective on regulatory developments in several ASEAN countries and India. I agree very much with the author's analyses and findings, however, to enrich and sharpen Morgan's analysis, I suggest several things:</p><p>First, Morgan does discuss general concepts of how fintech can promote financial inclusion, but it would be more interesting for example if he could provide examples or discuss how fintech in India or ASEAN can reduce transaction costs in financial transactions.</p><p>Second, Morgan points out that despite the rapid growth of alternative finance in recent years, the overall rate of penetration is still small. It will be useful if he could elaborate on the prospects of alternative finance in the future.</p><p>Third, one of the objectives of Morgan's paper is to discuss the relationship between financial inclusion and financial stability as well as the various risks that arise from the development of this fintech. However, I found the argument is very general. I think Morgan should be more articulate and more explicit about this so that readers can see this argument clearly.</p><p>Fourth, on regulatory issue, we understand that digital innovation happens so fast, the production cycle becomes so short. Goods or services made today will become obsolete in a short period of time. So how does the government regulate it? Regulations will tend to lose ground quickly when the new technologies emerge. How can the government make regulations for one industry or one product, if the rules soon become obsolete due to new innovations. Government regulations or laws, I believe, will need to be more general and flexible in the future. The issue is that if the regulations are not explicit, how can they adequately govern them? The conundrum is that while innovation cannot be stifled, it must be protected. What is the best way to draw this line? This is a big issue that might become a potential problem in the future.","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"209-210"},"PeriodicalIF":3.9,"publicationDate":"2022-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12386","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83513588","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>China has shown an impressive development of the fintech industry over the past decade or so. The fintech industry has grown fast in several areas, including mobile payments, online lending, and investment. The progress of the fintech industry has expanded access to financial services to hundreds of millions of people who could not get access to traditional financial institutions. The stunning performance of China's fintech industry has raised interesting questions: what are the key contributing factors to its success?; what is the government's role in supporting fintech development?; and is China's experience applicable to other countries?</p><p>Chorzempa and Huang (<span>2022</span>) provide a concise and informative analysis of China's fintech development. It also discusses how policies and regulatory measures have evolved since the advent of fintech and evaluates the government's recent crackdown on big fintech companies. It can be a useful reference for readers who want to understand the main characteristics of China's fintech industry and policy. Nevertheless, I have several comments.</p><p>First, it would be useful if Chorzempa and Huang analyze the main factors of China's fintech development more thoroughly with an empirical framework and data. They argue that China's fintech industry development since 2004 when Alibaba launched the online payment system is attributed to a number of factors including a big market size, a highly repressive financial policy, the rapid development of digital technology, and the relatively friendly approach of the authorities to fintech. To strengthen this main argument, further empirical exercises are recommended. Regarding this, a useful exercise would be to assess, quantitatively with cross-country data, the extent to which each of these key factors has contributed to the adoption and growth of fintech in China much faster than in other countries. Adopting a regression method can be helpful to investigate the role of demand and supply factors in the faster rise of fintech in China. Furthermore, it would be interesting to apply this empirical analysis to China's microdata and examine the determinants of fintech proliferation across regions in China. The Beijing University Digital Finance Inclusion Index of China's Peking University shows that despite a significant expansion of the fintech industry, there are considerable disparities across China's provinces and cities.</p><p>Second, it is necessary to carefully evaluate how the recent government crackdown on the fintech giants will affect the whole financial industry and the overall economy in the long term. Chorzempa and Huang (<span>2022</span>) points out that “change in the policy stance toward the Ant Group affects not just fintech activities, but also the policy enablers that will affect the whole sector.” While fostering innovation, China's lax regulation of the fintech industry in the past has created many risks and loopholes in the financial sys
{"title":"Comments on “Chinese Fintech Innovation and Regulation”","authors":"Jong-Wha Lee","doi":"10.1111/aepr.12385","DOIUrl":"10.1111/aepr.12385","url":null,"abstract":"<p>China has shown an impressive development of the fintech industry over the past decade or so. The fintech industry has grown fast in several areas, including mobile payments, online lending, and investment. The progress of the fintech industry has expanded access to financial services to hundreds of millions of people who could not get access to traditional financial institutions. The stunning performance of China's fintech industry has raised interesting questions: what are the key contributing factors to its success?; what is the government's role in supporting fintech development?; and is China's experience applicable to other countries?</p><p>Chorzempa and Huang (<span>2022</span>) provide a concise and informative analysis of China's fintech development. It also discusses how policies and regulatory measures have evolved since the advent of fintech and evaluates the government's recent crackdown on big fintech companies. It can be a useful reference for readers who want to understand the main characteristics of China's fintech industry and policy. Nevertheless, I have several comments.</p><p>First, it would be useful if Chorzempa and Huang analyze the main factors of China's fintech development more thoroughly with an empirical framework and data. They argue that China's fintech industry development since 2004 when Alibaba launched the online payment system is attributed to a number of factors including a big market size, a highly repressive financial policy, the rapid development of digital technology, and the relatively friendly approach of the authorities to fintech. To strengthen this main argument, further empirical exercises are recommended. Regarding this, a useful exercise would be to assess, quantitatively with cross-country data, the extent to which each of these key factors has contributed to the adoption and growth of fintech in China much faster than in other countries. Adopting a regression method can be helpful to investigate the role of demand and supply factors in the faster rise of fintech in China. Furthermore, it would be interesting to apply this empirical analysis to China's microdata and examine the determinants of fintech proliferation across regions in China. The Beijing University Digital Finance Inclusion Index of China's Peking University shows that despite a significant expansion of the fintech industry, there are considerable disparities across China's provinces and cities.</p><p>Second, it is necessary to carefully evaluate how the recent government crackdown on the fintech giants will affect the whole financial industry and the overall economy in the long term. Chorzempa and Huang (<span>2022</span>) points out that “change in the policy stance toward the Ant Group affects not just fintech activities, but also the policy enablers that will affect the whole sector.” While fostering innovation, China's lax regulation of the fintech industry in the past has created many risks and loopholes in the financial sys","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"293-294"},"PeriodicalIF":3.9,"publicationDate":"2022-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12385","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87810143","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
<p>A recent Asian Development Bank (ADB) report reveals that the global digital sector expansion would allow Asia and the Pacific to generate an economic dividend of more than $1.7 trillion per year, and create 65 million new jobs annually over the next 5 years (Asian Development Bank (ADB), <span>2021</span>). In the finance sector, accelerated digitalization can potentially close the persistent financial inclusion gap between the rich and the poor, especially in developing countries. To empirically examine digital-based financial inclusion, Khera <i>et al</i>. (<span>2022</span>) develop a novel, comprehensive index of digital financial inclusion for 52 emerging and developing economies for 2014 and 2017. The index is constructed by combining the widely used cross-country data on financial inclusion and related aspects. Essentially, Khera <i>et al</i>. determine striking “digital leapfrogging” patterns in financial services. Countries in Asia and the Pacific as well as Africa have increasingly accelerated digital financial inclusion compared to other regions (Kera <i>et al</i>.’s Figure 2). In the wake of rapid digitalization, if the index is extended beyond 2020, it will offer valuable information to determine the impact of COVID-19 and identify suitable “build-better” policies for a desirable new normal.</p><p>Although Khera <i>et al</i>. and its database are significant, certain issues remain. First, Khera <i>et al</i>. can potentially strengthen the interpretation and analysis of each chart. For example, Khera <i>et al</i>. may discuss potential determinants of differentiated trajectories of the nexus between traditional financial and digital financial inclusion, as demonstrated in their Figure 4. While I agree with Khera <i>et al</i>. that these diverse patterns could be driven by substitution between traditional and digital financial services, they could have verified whether the upper-left group in their Figure 4 corresponds with an initially low level of traditional financial system.</p><p>Second, according to the list of variables employed, the new index seems to miss the popular use of digital financial transactions in the real world. For example, the poor in developing economies are already using mobile phone apps to receive or send money bilaterally, pay for online and offline purchases and transactions, for loan repayments and savings, and mobile phone recharge load.</p><p>Third, although the digital divide could drive financial exclusion of the poor, these heterogeneities of digital financial access or use are not considered in the index. The lack of financial and digital literacy could widen the initial digital gap between the rich and the poor. In addition to within-country gaps, digital divide can emerge across countries at an aggregate level, and it will be useful to show, for example, the distribution of the index in Khera <i>et al</i>.’s Figure 1 by subregions in Asia.</p><p>Fourth, the index may need to directly incorporate
亚洲开发银行(ADB)最近的一份报告显示，全球数字行业的扩张将使亚太地区每年产生超过1.7万亿美元的经济红利，并在未来5年内每年创造6500万个新就业岗位(亚洲开发银行(ADB)， 2021年)。在金融部门，加速数字化有可能缩小贫富之间持续存在的普惠金融差距，特别是在发展中国家。为了实证检验基于数字的普惠金融，Khera等人(2022)为2014年和2017年的52个新兴和发展中经济体开发了一种新的、全面的数字普惠金融指数。该指数通过综合广泛使用的普惠金融及相关方面的跨国数据构建而成。从本质上讲，Khera等人确定了金融服务中引人注目的“数字跨越式”模式。与其他地区相比，亚太地区和非洲国家的数字普惠金融发展速度越来越快(Kera等人的图2)。在快速数字化之后，如果该指数延长到2020年以后，它将提供有价值的信息，以确定2019冠状病毒病的影响，并为理想的新常态确定合适的“建设更好”政策。尽管Khera等人及其数据库意义重大，但仍存在一些问题。首先，Khera等人可以潜在地加强对每个图表的解释和分析。例如，Khera等人可能会讨论传统金融和数字普惠金融之间联系的差异化轨迹的潜在决定因素，如图4所示。虽然我同意Khera等人的观点，即这些不同的模式可能是由传统金融服务和数字金融服务之间的替代所驱动的，但他们本可以验证图4中左上角的群体是否与最初较低水平的传统金融体系相对应。其次，根据所使用的变量列表，新指数似乎忽略了现实世界中数字金融交易的普遍使用。例如，发展中经济体的穷人已经在使用手机应用程序进行双边收款或汇款，支付线上和线下的购物和交易，偿还贷款和储蓄，以及手机充值。第三，尽管数字鸿沟可能导致穷人被金融排斥，但这些数字金融获取或使用的异质性并未被纳入该指数。缺乏金融和数字知识可能会扩大贫富之间最初的数字差距。除了国家内部差距之外，数字鸿沟还可能在总体水平上出现在国家之间，因此，显示Khera等人的图1中按亚洲次区域划分的指数分布将是有用的。第四，该指数可能需要直接纳入有关获得必要基础设施的信息(Khera et al.， 2021)。例如，考虑到很大一部分工人和个体经营者以现金方式领取工资和付款，将现金转换为数字货币，进入便利店的金融亭等数字网点是数字金融交易必不可少的为了完善指数，有关于数字平台渗透率和网络准备程度的跨国数据(亚洲开发银行(ADB)， 2021年)。最后，缺乏适当的数据隐私和网络安全法律、法规和条例可能导致不信任，破坏有效的数字普惠金融。根据世界经济论坛《全球风险报告(2020)》，76.1%的受访者将网络安全列为2020年的五大风险。必须将这些方面与治理质量结合起来。这些问题将推动该指数在未来进一步完善。
{"title":"Comment on \"Measuring Digital Financial Inclusion in Emerging Market and Developing Economies: A New Index\"","authors":"Yasuyuki Sawada","doi":"10.1111/aepr.12388","DOIUrl":"10.1111/aepr.12388","url":null,"abstract":"<p>A recent Asian Development Bank (ADB) report reveals that the global digital sector expansion would allow Asia and the Pacific to generate an economic dividend of more than $1.7 trillion per year, and create 65 million new jobs annually over the next 5 years (Asian Development Bank (ADB), <span>2021</span>). In the finance sector, accelerated digitalization can potentially close the persistent financial inclusion gap between the rich and the poor, especially in developing countries. To empirically examine digital-based financial inclusion, Khera <i>et al</i>. (<span>2022</span>) develop a novel, comprehensive index of digital financial inclusion for 52 emerging and developing economies for 2014 and 2017. The index is constructed by combining the widely used cross-country data on financial inclusion and related aspects. Essentially, Khera <i>et al</i>. determine striking “digital leapfrogging” patterns in financial services. Countries in Asia and the Pacific as well as Africa have increasingly accelerated digital financial inclusion compared to other regions (Kera <i>et al</i>.’s Figure 2). In the wake of rapid digitalization, if the index is extended beyond 2020, it will offer valuable information to determine the impact of COVID-19 and identify suitable “build-better” policies for a desirable new normal.</p><p>Although Khera <i>et al</i>. and its database are significant, certain issues remain. First, Khera <i>et al</i>. can potentially strengthen the interpretation and analysis of each chart. For example, Khera <i>et al</i>. may discuss potential determinants of differentiated trajectories of the nexus between traditional financial and digital financial inclusion, as demonstrated in their Figure 4. While I agree with Khera <i>et al</i>. that these diverse patterns could be driven by substitution between traditional and digital financial services, they could have verified whether the upper-left group in their Figure 4 corresponds with an initially low level of traditional financial system.</p><p>Second, according to the list of variables employed, the new index seems to miss the popular use of digital financial transactions in the real world. For example, the poor in developing economies are already using mobile phone apps to receive or send money bilaterally, pay for online and offline purchases and transactions, for loan repayments and savings, and mobile phone recharge load.</p><p>Third, although the digital divide could drive financial exclusion of the poor, these heterogeneities of digital financial access or use are not considered in the index. The lack of financial and digital literacy could widen the initial digital gap between the rich and the poor. In addition to within-country gaps, digital divide can emerge across countries at an aggregate level, and it will be useful to show, for example, the distribution of the index in Khera <i>et al</i>.’s Figure 1 by subregions in Asia.</p><p>Fourth, the index may need to directly incorporate","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"17 2","pages":"233-234"},"PeriodicalIF":3.9,"publicationDate":"2022-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12388","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74369898","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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