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Introduction design digital yuan is gaining more and more pace. The new currency is being tested in other cities. Will it become a threat to the position of the US dollar?
China first with digital currency
China does not intend to lag behind Europe and the United States in the development and implementation of digital payment methods. What's more, they even gain an advantage in this field. It is possible that the People's Republic of China will be the first country with its own digital currency.
In addition, the next wave of COVID-19 that hit China forced the authorities to introduce new restrictions. Digital Yuan (CBDC) is currently being tested in Shenzhen and several other cities.
CBDC will take the lead
For over a year, the People's Bank of China (PBoC) has been carrying out activities related to the introduction of the digital yuan, also known as e-CNY. Its testing now covers more Chinese cities. There are even voices that the digital yuan will be able to compete with Bitcoin while depriving the US dollar of its dominant position in international financial markets.
New regions under digital yuan testing
The testing of the digital yuan began a year and a half ago. Regions such as Tianjin, Chongqing and Guangzhou were included. In April, the People's Bank of China issued a statement that more districts will be tested. These are the Fuzhou Xiamen regions located in Fujian Province and six cities (Hangzhou, Ningbo, Wenzhou, Huzhou, Shaoxing and Jinhua) located in Zhejiang Province, where the Asian Games will be held in September.
Thanks to digital yuan testing, many application models have been created that have been used in areas such as trade, gastronomy, tourism and the entertainment industry. It can be assumed that the current stages of testing the new currency will lead to the development of its full cycle and circulation. Consequently, CBDC will be widely used in society.
The Chinese check CBDC
According to PBoC, by the end of 2021, Chinese citizens had opened nearly 261 million digital yuan wallets. The value of the transactions carried out with them amounted to approximately 87,57 billion yuan.
To popularize CBDC, the authorities of Futian District in Shenzhen Province announced that in a special lottery, residents will be given 15 million digital yuan, divided into 130 packages. The funds can be spent in the indicated stores. This is not the first action of this type, because in the fall of 000, the inhabitants of Shenzhen were given nearly 2020 million yuan as part of the tests of the new digital currency.
