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China set to go cashless China set to go cashless
China has begun trials on the e-RMB or digital Yuan, the world’s first digital currency to be rolled out by a major economic player.... China set to go cashless

China has begun trials on the e-RMB or digital Yuan, the world’s first digital currency to be rolled out by a major economic player. The digital Yuan will debut in four of China’s largest cities, according to local media.

After initial scepticism about coin offerings, China’s central bank will launch the digital currency before its chief rival, the United States.

The cities of Shenzhen, Suzhou, Chengdu and Xiong’an – a new city south of Beijing – have reportedly trialled the new digital currency in some capacity, according to the Wall Street Journal.

Government employees and civil servants are already being paid in the new currency in cities that have allowed it into their existing monetary systems. Metropoles, like the new Xiong’an area, have tried out the currency in the food and retail sectors, while Sina News reported it would be used to subsidise transport in the city of Suzhou.

In a little over two decades, China has gone from a predominantly rural, agrarian economy to a global superpower with a robust middle class in most of its major cities. With more than 800 million active internet users, China has become comfortable with digital payment and e-commerce in the past few years.

China concluded an estimated 577 million unique mobile merchant payments in 2019, with that figure expected to climb to around 700 million in 2022, totalling around US$20 trillion of transactions.

CGAP, a think tank that focuses on financial inclusion, has said China’s digital payment ecosystem is built on the back of sophisticated, existing financial infrastructure. Two of the world’s biggest payment companies, Alipay and WeChat Pay, began as third-party payment companies, but now account for 78% of the Chinese population’s bank accounts.

The current global pandemic has thrust contactless transactions into the limelight and this early initiative from China may serve as a litmus test for the further global digitisation of currency.

https://www.theguardian.com/world/2020/apr/28/china-starts-major-trial-of-state-run-digital-currency

https://www.coindesk.com/blockchain-now-officially-part-of-chinas-technology-strategy

https://www.wsj.com/articles/china-rolls-out-pilot-test-of-digital-currency-11587385339

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