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The Chinese government has recently finished tests of the digital yuan. During the experiment, about 50,000 Beijingers received 200 digital yuan they could use for shopping online or offline. The overall sum of the payments totaled $1.5 billion.
The key aim of the test is to find out how the implementation of digital money could influence the increase in the consumer activity during China’s Lunar New Year holidays. This is a steppingstone to the official launch of the e-currency. Notably, China is the first country that began considering the digitalization of its national currency. It conducted the first trials in 2020, and it immediately became obvious that the new form of money had several advantages.
Blockchain became a real boon for China’s government obsessed with total control. The local central bank got access to all transactions made by the users of the digital yuan. The digital currency provides the regulator with the opportunity to monitor the money circulation and prevent the capital outflow.
Moreover, the introduction of the e-money will contribute to the opening of the Chinese financial market for foreigners. This, in turn, may boost the yuan implementation in international trading and investments.
“This idea sits well inside China’s Dual Circulation framework, improving transparency within China, while growing the CNY’s use externally as a compelling alternative to the US dollar in transactions,” experts at Saxo Bank noted.
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