The Chinese government recently urged giant American companies such as McDonald’s, Visa, and Nike to expand the digital yuan trial to more outlets in the country in anticipation of the Winter 2022 Beijing Olympics.
In Shanghai, the central bank digital currency (CBDC) is accepted in 270 McDonald’s restaurants, but the government wants the digital yuan payment method to be used more widely.
Another e-CNY enterprise zone
An e-CNY enterprise zone is to be launched by the Municipal Administrative Center of Beijing to explore the digital renminbi financial system in Beijing. To enable faster transactions for the experimental digital currency, there are plans to improve the 5G infrastructure in the city.
The Municipal Administrative Center zone is the second to test e-CNY in the city. Earlier this year in June, the location of the Winter Olympics 2022, Shijingshan district indicated support to test e-CNY transactions with foreign tourists.
The pilot application of the Beijing Legal Digital Currency Pilot zone is being conducted by six state-owned banks of Industry, Agriculture, China, Construction, Communications, and Postal Savings. The People’s Bank of China and the Beijing Municipal Financial Supervision and Administration Bureau have also supported this pilot application.
Multi-dimensional digital RMB application scenarios have been developed in sectors including business, leisure and entertainment, shopping consumption, tourism, catering, and accommodation services. It also involves some major areas such as Wanda Plaza, Donglang Cultural and Creative Park, Beijing Universal Resort, and Canal Business District.
There are plans to improve the renminbi payment function while innovating digital renminbi payment and exchange methods, promoting smart wearable payment devices, accelerating the deployment of digital renminbi exchange machines, and providing the convenience of exchange between domestic and foreign currencies and digital renminbi.
With this latest developments, China is poised to follow the footsteps of Bahamas, which launched its central bank digital currency in October 2020.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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