(ATF) China has begun testing its digital yuan in high-end shopping malls, according to reports amid concern that a full rollout of China’s central bank digital currency (CBDC) will undermine cryptos such as bitcoin.
Prestigious shops in downtown Shanghai are using the pilot CBDC, according to China’s Global Times. Shoppers can use the virtual coin in different outlets via vending machines, the report said.
More vendors are being added to China’s CBDC programme after it was launched last year in a bid to keep control of spending and cash within the central authorities. Tests began among public authority workers in Suzhou city before being rolled out to wider use in Shenzhen and Chengdu. McDonald’s and Starbucks are among the big-name outlets that have also signed onto the pilot.
Also on ATF
- China tests cross-border digital currency links
- Cryptos eye new peaks as usage widens
- BNY Mellon joins institutional surge of acceptance for bitcoin
Last week crypto market maker B2C2 boss Philip Gillespie told Bloomberg that the digital yuan could pose a risk to bitcoin and other leading digital currencies. Gillespie argued that the formal introduction of China’s CBDC - which hasn’t yet been given a date – would probably lead to a crackdown on private cryptos.
A sudden surge of selling pressure in China could set off a chain of events that destabilise bitcoin and its peers, he reportedly told Bloomberg.
Once fully rolled out, the digital yuan will have the same value as banknotes and coins, and would be the country's legal tender. There is national credit endorsement and "legal compensation” also attached.
This is not something a business or an individual can refuse to use, local media Eastmoney wrote last year, suggesting the government will ensure other digital payments such as Alipay and WeChat pay will also suffer.