China’s digital yuan could be the future of money
Wednesday, 05 19 2021, Category: Technology, Country: China
China is making promising progress with testing its digital yuan currency. It has announced the success of a pilot in Suzhou City, near Shanghai in eastern China, where 181,000 consumers were given ¥55 of free money in digital wallets to spend at participating outlets in the Double Fifth shopping festival between May 1 and 5.
This was part of a bigger test by the People’s Bank of China targeting 500,000 consumers in 11 Chinese regions since April. For those eligible, there is a straightforward app to download which gives them a wallet. Using this to make purchases in thousands of participating stores, they receive discounts.
The digital yuan is a version of the normal Chinese currency deployed on a blockchain, which is the tamper-proof online ledger technology that underpins digital coins like Bitcoin and Ethereum. However, this blockchain is permissioned, meaning the People’s Bank decides who can use it.
The latest round of tests is ten times the size of the original round that took place in autumn 2020. China has also been trialling the digital yuan cross-border between Hong Kong and neighbouring Shenzhen and is developing a platform for making the currency internationally viable that involves Thailand, the United Arab Emirates and the Bank of International Settlements.