- China expands the test pilot of the digital yuan.
- Citizens of Suzhou will be able to spend coins both online and offline.
The Chinese authorities plan to launch another digital yuan handout. This time the lottery with the so-called red packets will be rolled out in the city of Suzhou, Chinese insider The Paper reports.
Chinese authorities inspired by Shenzhen success
The test program with the digital yuan will be launched on December 12 to coincide with a Chinese year-end shopping festival known as Double 12. According to The Paper, local retailers and service providers have been integrating the infrastructure with Near Field Communication (NFC) technology and QR-code to start accepting payments in digital yuans. To process the payment, users will need to touch two payment devices.
Notably, this time the owners of the state-backed digital asset will be able to spend it offline, in brick-and-mortar stores. This feature was not available in the first digital yuan test to Shenzhen citizens, who paid their digital yuans only online. While the lottery's exact conditions remain unknown, according to the preliminary information, the People's Bank of China will distribute $1.5 million in digital yuan to Suzhou citizens.
The first social experiment with digital currency created by the People's Bank of China took place in Shenzhen at the end of October. According to the South China Morning Post, nearly 2 million people participated in the lottery in hopes of getting digital money, but only 50,000 citizens received the red packets with 200 coins. The authorities distributed about 10 million tokens and about 80% of them were spent within the first week of the experiment.
Apart from that, Chengdu's Chinese city is also performing a closed beta-testing of DC/EP wallets via "a large bank".
China pursues a double-standard policy
The Chinese authorities are pushing hard with the digital yuan launch. The country wants to reap the benefits of being the first country that launches its state-backed digital currency. The industry experts believe that the pioneer will get the chance to become the financial capital of the world.
Thus, Zhao Changpeng, the head of the world's largest cryptocurrency exchange by trading volumes Binance, noted that by launching digital currency China might attract massive investment inflows.
The first one to have a central bank digital currency working will be in a position to attract a lot of international usages, international volumes. This probably will help significantly in making RMB a more dominant currency in the world, and if that works, then I think that will put pressure on other central banks to get their own central bank digital currency out as soon as possible, he said in the interview with Bloomberg.
At the same time, the authorities are tightening their grip on cryptocurrency exchanges and the private issuers of digital coins. Recently, FXStreet reported that China launched investigations against top-managers of OKEx and Huobi, the two largest trading platforms in Asia. Another trading platform, TokenBetter, was also rumoured to be under investigation.
Also, the People's Bank of China issued a draft proposal to prohibit private companies and individuals from selling and creating yuan-backed digital tokens and individuals. If the proposed legislation is approved, the authorities will have the power to forfeit any proceed from such sales.
Experts believe that the authorities have been implementing harsh measures to remove the competition ahead of the digital yuan launch.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms
Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.
Litecoin poised for double-digit decline after breaking ascending trendline
Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC
21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.