• China’s Digital Yuan’s development has raised the alarm in several nations like the United States, Europe, and Japan
  • China’s central bank has published a draft on Friday to turn their digital currency into legal tender

China is ready to issue its Central Bank’s Digital Currency (CBDC), the Digital Yuan. The most extensive test of China’s national digital currency is over now. Around 8.8 million Yuan ($1.3 million) spent in over 62,000 transactions during Shenzhen’s trial period.

However, the trial has been completed, still, users left with extra funds can use those at designated shops. This led to around 9,01,000 additional transfer of credits into the official application, the Renminbi app.

Is Digital Yuan a Cryptocurrency?

Digital Yuan cannot be considered as a cryptocurrency. However, it runs on the blockchain network but is issued and managed by China’s central bank. As it is the nation’s currency and operated by China’s central bank, it could be considered as the digital version of China’s physical currency.

China’s Central Banks Effort Coming to Reality

China’s Central bank has been working Since 2014 to launch its Digital Yuan. To bring the digital Yuan on a large scale transportation network, the central bank of china entered into a strategic partnership with the world’s second-highest valued unicorn startup, Didi Chuxing.

The Central Bank of China chose 28 cities, including major metropolitan areas like Beijing, Tianjin, Shanghai, Guangzhou, and Chongqing, to test its digital currency, Yuan. The bank worked on features like easy transfers and better security of their money. The Central Bank of China distributed red envelopes in a traditional way of gifting cash. The distribution followed in the form of online wallets. Each envelope contained 200 digital yuan and was randomly distributed to 50,000 selected customers.

Alarms have Been Raised in Several Nations

China’s Digital Yuan’s development has raised the alarm in several nations like the United States, Europe, and Japan. All these nations are concerned about Beijing being the dominant force behind such technologies involved in digital currencies.

According to a release from the European Central Bank, it is observed that following China’s digital Yuan, the central bank of Europe has also announced the possibility of launching its digital euro. After the European Central Bank’s announcements, the Bank for International Settlements, including seven Western Central Banks with European Central Bank, Fed Bank of Japan, and Bank of England, to guide exploration and support public policies. They published a detailed report of foundational principles and core features of potential CBDC.

Meanwhile, Facebook’s plans have also been revealed about publishing Facebook’s digital coin, ‘LIBRA.’ However, the United States and other regulators have rejected their proposals.

While several nations are yet to commit the launch of their national currency, China’s central bank has published a draft on Friday to turn their digital currency into legal tender. However, the draft also mentioned the ban on issuing cryptocurrencies by private sectors. A new concern will arise in destabilizing the existing financial system.

Source: thecoinrepublic.com

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