China’s digital yuan gets first major test
Ride-hailing giant Didi Chuxing is testing China’s digital cash as an option for payment on its platform. This is the very first real-world applications of the electronic version of the Chinese currency yuan.
A Chinese start-up company said that it is working with People’s Bank of China on uses for the virtual legal tender dubbed Digital Currency Electronic Payment, or DCEP. Testing the token on its ride-hailing platform will be done according to the spoke person of the start-up. But the start-up has said anything clear about the launching date of China’s digital cash.
A few months ago the Chinese government began a pilot program for its digital currency, which lives on a mobile wallet application. Introduction of new digital currency will offer Beijing greater control of the country’s financial system.
The initial testing of the digital currency was limited to four cities. It is said that some of the money was distributed via transport subsidies to residents in Suzhou. But authorities of people’s bank of china did not respond to the implementation of Chinese digital currency. China’s $27 trillion payments industry is already dominated by twin internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
Didi Chuxing is the world’s leading mobile transportation platform which connects half a billion Chinese commuters would drive acceptance of China’s digital coin. This also widens Chinas global lead in government-sanctioned virtual tokens. Didi currently employs payment tools from Tencent and Alibaba-backed Ant Group, so it would appear to be a good candidate for Digital Currency Electronic Payment. Didi is also planning to attract grocers and merchants onto its platform and they could also become users of the national digital tokens. This would increase the acceptance of the digital currency.
China has started the research for the development of digital legal tender early 2014. The digital currency is intended to eventually replace coins and banknotes and could offer an alternative to the dollar-based international payments systems.