A digital yuan wallet is being tested in China. Not as cryptocurrency, but as a digital state-controlled currency. The application will replace only coins and banknotes, while payment cards will be retained.
The People’s Bank of China is behind the pilot version of the application. It has been working on a digital yuan for several years and has gained a fairly decent lead over the rest. The development is led by an effort to replace cash in overpopulated China and to prevent illegal money laundering.
Working on getting it perfect
Last fall, Bank Governor Yi Gang said that China would continue to develop the central bank’s digital currency, improve its design and use, and improve its cooperation with current payment systems.
Paper money first originated in China in the second half of the 1st century. It is now becoming the first country to move towards a modern payment tool that can function without paper currency.
Testing at the Olympics
The People’s Bank of China has said it plans to use and promote this currency at the upcoming Winter Olympics which are scheduled for February this year. This has provoked a negative reaction among some US senators, however, who have advised American athletes not to use the currency.
Waiting for that important documentThe US Federal Reserve is still studying a Central Bank Digital Currency (CBDC) and considering all the pros and cons of creating a digital dollar. It will summarize its conclusions in a document still under preparation.