Page 6 - South China Business Journal
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PTH
China’s Digital
Yuan:
Development
Status and
Possible Impact
for Businesses
By Zoey Zhang, China Briefing, Dezan Shira & Associates
Governments around the world are exploring the were preparing to test the use of digital yuan for
viability of digital currency. According to the cross-border payments.
BIS, 80 percent of the world’s central banks have In the latest digital currency trials, Suzhou
already started to conceptualize and research the municipal government announced on December 4
potential of Central Bank Digital Currency (CBDC), that it would give away 100,000 digital red packets,
40 percent are building proofs-of-concept (PoC), each containing RMB 200 (US$31) and totaling
and 10 percent are deploying pilot projects. RMB 20 million (US$3 million), to residents
China is at the forefront and is expected to become via a lottery. Suzhou has been spearheading the
the first major economy to launch a CBDC. Its digital currency trails. Since May, some Suzhou
sovereign digital currency program, dubbed Digital government employees have been receiving their
Currency Electronic Payment (DCEP), has launched transport subsidies in the form of digital currency.
one of the largest real-world trials in several cities One month ago, a similar trial was run in the
over the last few months. By May 2020, China had southern tech hub of Shenzhen. In October, the city
already filed more than 120 patent applications for carried out a lottery to give away a total of RMB 10
its official digital currency (alternately referred to million (US$1.5 million) worth of the digital yuan.
as digital yuan in this article), more than any other Nearly two million people applied, and 50,000
country. of them won. The winners downloaded a “digital
What is the development status of China’s RMB app”, received the digital yuan debuted with
DCEP? a face value of RMB 200 (US$31), and spent it at
On-the-ground trials and tests over 3,000 merchants in a particular district of
This April, China’s central bank, the People’s Bank Shenzhen.
of China (PBOC), gave the green light to conduct Other trials are smaller. In April, Xiong’an
hypothetical-use tests of the digital yuan in several authorities invited 19 companies, including
regions – Beijing-adjacent Xiong’an New Area, McDonald’s, Starbucks, and Subway to test DCEP,
Shenzhen, Suzhou, Chengdu, and the Beijing 2022 though the initial result was not exciting – many
Winter Olympic Games locations. citizens did not install the payment system.
Another confirmed city is Hong Kong. On December The pilot city list will continue expanding, and
4, Hong Kong Monetary Authority (HKMA) Chief possibly add Shanghai, Changsha, Hainan,
Executive Eddie Yue said that the PBOC and HKMA Qingdao, Dalian, and Xi’an in the future, according
to Caixin, an influential Chinese news agency.
3 AMCHAM SOUTH CHINA
China’s Digital
Yuan:
Development
Status and
Possible Impact
for Businesses
By Zoey Zhang, China Briefing, Dezan Shira & Associates
Governments around the world are exploring the were preparing to test the use of digital yuan for
viability of digital currency. According to the cross-border payments.
BIS, 80 percent of the world’s central banks have In the latest digital currency trials, Suzhou
already started to conceptualize and research the municipal government announced on December 4
potential of Central Bank Digital Currency (CBDC), that it would give away 100,000 digital red packets,
40 percent are building proofs-of-concept (PoC), each containing RMB 200 (US$31) and totaling
and 10 percent are deploying pilot projects. RMB 20 million (US$3 million), to residents
China is at the forefront and is expected to become via a lottery. Suzhou has been spearheading the
the first major economy to launch a CBDC. Its digital currency trails. Since May, some Suzhou
sovereign digital currency program, dubbed Digital government employees have been receiving their
Currency Electronic Payment (DCEP), has launched transport subsidies in the form of digital currency.
one of the largest real-world trials in several cities One month ago, a similar trial was run in the
over the last few months. By May 2020, China had southern tech hub of Shenzhen. In October, the city
already filed more than 120 patent applications for carried out a lottery to give away a total of RMB 10
its official digital currency (alternately referred to million (US$1.5 million) worth of the digital yuan.
as digital yuan in this article), more than any other Nearly two million people applied, and 50,000
country. of them won. The winners downloaded a “digital
What is the development status of China’s RMB app”, received the digital yuan debuted with
DCEP? a face value of RMB 200 (US$31), and spent it at
On-the-ground trials and tests over 3,000 merchants in a particular district of
This April, China’s central bank, the People’s Bank Shenzhen.
of China (PBOC), gave the green light to conduct Other trials are smaller. In April, Xiong’an
hypothetical-use tests of the digital yuan in several authorities invited 19 companies, including
regions – Beijing-adjacent Xiong’an New Area, McDonald’s, Starbucks, and Subway to test DCEP,
Shenzhen, Suzhou, Chengdu, and the Beijing 2022 though the initial result was not exciting – many
Winter Olympic Games locations. citizens did not install the payment system.
Another confirmed city is Hong Kong. On December The pilot city list will continue expanding, and
4, Hong Kong Monetary Authority (HKMA) Chief possibly add Shanghai, Changsha, Hainan,
Executive Eddie Yue said that the PBOC and HKMA Qingdao, Dalian, and Xi’an in the future, according
to Caixin, an influential Chinese news agency.
3 AMCHAM SOUTH CHINA
