China plans to expand its digital yuan testing this year, with Beijing and Shanghai leading a list of major cities set to participate. The accelerated testing phase comes after a successful year for the state-backed digital currency in which it was used in most major cities.
One of the cities leading this testing phase is the capital, Beijing. As per a report by Chinese English language outlet Global Times, Beijing Mayor Chen Jining will lead the initiative. Jining said recently that the city will accelerate “the building of innovative demonstration zones for fintech and professional services in 2021.” One of the ways it will achieve this will be through the integration of the digital yuan.
Beijing has been one of China’s most blockchain-friendly cities. As CoinGeek reported, it ranked first among blockchain cities in the Asian nation.
In Shanghai, Mayor Gong Zheng has made a similar pledge. Zheng vowed to continue setting up the infrastructure that will allow residents to fully integrate the CBDC.
In Southern China, Guangdong will be leading the digital currency electronic payment (DC/EP) adoption this year. Governor Ma Xingrui stated recently that his government will promote the adoption of the digital yuan. Xingrui will especially focus on Shenzhen, a city that was among the first to embrace the CBDC.
In October 2020, Shenzhen conducted a pilot program in which $1.5 million was distributed to 50,000 lottery winners. Upon receiving the money, the residents conducted 62,788 transactions in which they spent $1.3 million.
According to one industry expert, these pilot tests are just a starting point. Speaking to Global Times, the unnamed veteran industry insider stated:
“The pilot testing is only the first step of a long march. Once launched, the digital yuan will reshape China’s financial industry and unleash a promising digital finance service sector worth billions of yuan.”
Unfortunately, the excitement around the digital yuan has led to the emergence of scammers. Recently, the Croatian financial watchdog exposed one such scammer that’s preying on people online. Known as the Yuan Pay Group, the scammers claim to be “the only approved and legalized company in China to trade the digital yuan.”
The Yuan Pay Group reportedly claims in one of its ads that, “For every 1$ you invest in January, expect potential profits of 5,040$ within mere months!” The group also provides alleged fake testimonies from celebrities including Sir Richard Branson and Peter Thiel.
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.
See also: CoinGeek Live panel, Better Payments: Improving the Consumer Experience with Bitcoin
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