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- China successfully completed its pilot test of its Central Bank Digital Currency (CBDC) in Shanghai.
- A total of 350,000 digital red envelopes was distributed and every envelope had a total of 55 digital Yuan.
- The People’s Bank of China (PBoC) is yet to disclose not announced the official dates of the launch of the Digital Yuan.
China is known as the pioneer of digital currency and has influenced several countries to work on their own CBDCs. However, after months and years of research and development, China is very close to launching their digital yuan and has potentially made an attempt to integrate them with people’s lives. A few days back China successfully completed its pilot test of its Central Bank Digital Currency (CBDC) in Shanghai. The pilot test distributed approximately 19.25 million yuan (about 3 million US dollars) through a lottery system. A total of 350,000 digital red envelopes were distributed and every envelope had a total of 55 digital Yuan.
China’s Triumph Over the Current Global Trade Policies Isn’t the Main Question
Pauline Loong, director of Hong Kong-based research consultancy Asia-Analytica said that the question isn’t whether China’s CBDC will triumph over the current policies of global trade and commerce.
According to Loong, the only question is the reach of China’s issue in solving issues related to who controls access to capital and its movements. Behind China’s digital currency is the country’s aim to reshuffle the country’s economic framework using the famous distributed ledger technology known as blockchain. China’s entry to the technology frontier started back in 2008 when the country was going through some serious financial crisis. China’s then President Hu Jintao in the G20 summit said that steadily promoting the diversification of the international monetary system.
China Started Securing Miners Way Before They Explored Cryptocurrencies
Back in 2012, the Chinese regulators noticed some change in the electricity consumption of the Xinjiang to Inner Mongolia region. China’s mining business constitutes 70% of total mining activities in the world. And Chinese miners as of now, mines 95% of the total bitcoin producer. In 2014, the People’s Bank of China started researching the possibility of a government bitcoin or more commonly known central bank digital currency (CBDCs). Ian Wittkopp, vice president at Beijing-based Sino Global Capital, said that even before China started using crypto, they had already started securing mining activities.
This is what created a strong base of blockchain and crypto ecosystem in China. By the end of October 2020, China had already started pilot testing the digital yuan for the masses. Soon, open participation by the citizens was encouraged.
Digital Yuan may be Unveiled During the 2022 Beijing Olympics
However, the People’s Bank of China (PBoC) is yet to disclose not announced the official dates of the launch of the Digital Yuan. But it is anticipated that it will be a legal tender before the Beijing Olympics scheduled for 2022. The visitors and the athletes that visit the country will be allowed to use the digital currency for purchases. This will be the first time when people outside the country will get exposure to digital Yuan. However, it is very unlikely for the customers to find any noticeable difference while using e-CNY as it will be the official form of currency.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
