China accelerates roll-out of digital yuan

China is now urging Beijing residents to make use of the e-yuan to pay for their subway commute.

CAPE TOWN, July 1 (ANA) – Since rolling out the testing phase of the digital yuan at the start of last month, China is now urging Beijing residents to make use of the e-yuan to pay for their subway commute.

According to the Global Times publication, the push in Beijing comes a day after a subway line in east China’s Suzhou city started accepting the e-yuan as payment, with plans to expand from retail scenarios to broader applications, which include cross-border payments.

“The 2022 Beijing Winter Olympics will likely become the first scenario for digital yuan to be used in large-scale cross-border payments,” Liu Dian, an associate research fellow at the Chongyang Institute for Financial Studies of Renmin University, told the Global Times on Wednesday.

Liu added that, while China is pushing the digital yuan, its neighbours Hong Kong, Singapore and Thailand have also stepped up their search for digital currency solutions.

China’s central bank digital currency (CBDC) project launched in Chengdu earlier this year. Ledger Insights, a blockchain news and information website, reported that the e-yuan pilot project involved 200,000 people and 40 million e-yuan (US$6.2 million).

The targeted locations for the pilot ahead of the Winter Olympics included Shenzhen, Suzhou, Beijing and Chengdu.

The urgency for a cashless economy comes as China looks to curb fake money and money laundering and to allow greater development of online shopping.

China’s currency reform came into play after its leader, Xi Jinping, backed blockchain technology in the nation’s bid for industrial and technological transformation.

Blockchain, known for being linked to cryptocurrency such as Bitcoin, will be the backbone of this transformation. The technology uses sophisticated maths and cryptography to provide an open decentralised database for any transaction that involves value in the form of money, goods, property and even votes.

Meanwhile, earlier this year, the central banks of China, Hong Kong, Thailand and the United Arab Emirates announced they would collaborate on a CBDC project to allow for cross-border payments.

– African News Agency (ANA); Editing by Yaron Blecher