Cashless: The Move Towards Digital Chinese Yuan

China gears towards a cashless society. The country will introduce the digital Chinese yuan in Suzhou City amounting to 50,000 packets.

In fact, the initiative is a part of the transition’s trial period which will take place on December 12, one of the biggest shopping days of the year.

Consumers are likely to flock to e-commerce platforms amid the holiday shopping bonanza.

In a brief context, a similar mechanism was tested on Shenzhen back in October. More specifically, the result of the trial includes the entrance of about $1.5 million of digital currency into circulation.

The primary source includes a local lottery where the prize money is given online. The money will then be redeemable in over 3,000 participating stores within the city.

According to reports, the new experiment in Suzhou will include offline transactions for the virtual renminbi. 

Similarly, one of the mechanisms worth exploring is enabling the completion of transactions through the near field communication. 

The NFC, allowing communication between two devices without the need for an internet connection, is likely to expand payment opportunities offline.

In many areas, the internet and data connection remains one of the most persistent bottlenecks in making online transactions among relevant stakeholders.

Currently, China leads all other major global economies in launching virtual currency.

In recent years, the country is very adamant to curb the presence of cryptocurrency platforms in its borders.

It does not recognize crypto as legal and the banking system does not accept their presence on their respective platforms.

Due to this, the launch of the digital Chinese yuan came as a surprise. However, unlike the decentralized cryptos, the digital currency will be regulated by the central bank.

The PBC currently prepares to roll out the central bank digital currency infrastructure in the coming weeks.

Dollar Continues to Plummet

While the Chinese currency’s ancillary services advance, the dollar continues to record setback.

The US currency starts the week in the red, pressured by the growing risk sentiment in the market and the upcoming meeting by the Federal Reserve in December.

The USD index, which tracks the performance of the greenback against other entities in the basket of currencies, slipped by 0.1%. It settled at 91.707 which is its lowest since April 2018.

It will be ending the month with a 2.4% drop, pulled down by the downward pressure from the optimistic reports from three major pharmaceutical companies.

With this, the euro steadied and clinched a 0.1% increase. It closed to a three-month high of $1.1968.