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China embarked on developing its digital currency in 2014—a digital yuan that’s regulated by the central bank.
e-CNY as a legal tender and its new issuance layer
The People’s Bank of China (PBoC) has been actively leading the work on digital yuan, a central bank digital currency (CBDC) that aims to replace some of the cash in circulation.
In April 2020, electronic Chinese yuan (e-CNY) pilot programs launched in the four cities of China. As a legal tender, the e-CNY is accepted by all entities in the country. Similar to the paper Chinese yuan, its issuance is facilitated by the PBOC. The worth of one e-CNY is equal to one yuan in paper currency, and each is exchangeable with the other. Users can also hold e-CNY in a mobile phone “e-wallet” app.
Di Gang, deputy director of the People’s Bank of China Digital Currency Research Institute, recently delivered a keynote speech on the topic of “Blockchain Technology Boosts the High-quality Development of Digital Finance.” He explained that the Chinese central bank is exploring using blockchain at the issuance layer of its CBDC.
McDonalds and other American companies urged to accept digital yuan before Olympics
According to reports, the Chinese government is urging fast food giant McDonalds to expand the digital yuan trial to more of its restaurants across the nation, in anticipation of the 2022 Beijing Winter Olympics.
The digital yuan pilot scheme started in Shanghai with 270 McDonalds restaurants currently accepting digital yuan as a means of payment. Now the Chinese government is urging the fast-food giant to roll out the digital yuan payment more widely.
The reports also revealed that other retail giants such as Visa and Nike were also pressured to accept the CBDC.
China is determined to ensure that the digital yuan is available nationwide before the Beijing Winter Olympics, which is to start in February 2022, but the pandemic may have resulted in these ambitions being curtailed.
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.
Watch: CoinGeek New York presentation, BSV Blockchain in China
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
