FX.co ★ China inches closer to its digital yuan

Life in China is gradually returning to normal. Chinese social media seems to be no longer buzzing with the news under the #coronavirus hashtag. Another off-topic report was the news on testing a digital wallet for China's official central bank cryptocurrency. Local authorities were among the first to see the key advantage of blockchain technology as a perfect tool to control the whole financial system. The country launched its own stablecoin, dubbed DCEP (DC/EP, Digital Currency Electronic Payment). The largest local banks are already developing their own versions of digital wallets that will allow to work with the national cryptocurrency.

The digital yuan is currently being tested by the Agricultural Bank of China. What is more, its digital wallet is already available to some commercial banks in Shenzhen, the new economic region of Xunan, Chengdu, and Suzhou. The system proposed by the People’s Bank of China implies a direct replacement for the currency currently in circulation, that is, the yuan. Therefore, citizens and companies will be able to open wallets in these banks and use the new electronic payment method. China's commitment to being the first in the world to roll out a national digital currency has not gone unnoticed by the United States. The US Federal Reserve is also exploring the possibility of issuing the central bank digital currency.