Digital Yuan Began To Be Tested In China: Who Will Be The First To Receive Payment In Digital Currency?
If earlier information on the introduction of the digital renminbi yielded to doubts, today’s news can radically change the market paradigm shortly. It became known that the Chinese authorities began to test the digital yuan as a means to pay officials and senior executives of enterprises. This was reported by local journalists.
Undoubtedly, the recession of China due to the blocking of the country and strict quarantine measures that were taken under the onslaught of the spread of Coronavirus became the driver for introducing the digital renminbi. Many analysts believe that this measure will allow the country to overcome the crisis as soon as possible.
It also turned out that Alibaba Ant Financial took part in the development and testing of the blockchain for the digital renminbi.
How will the digital renminbi test be held in Suzhou?
Suzhou became one of the cities that was determined by the authorities to test digital currency. It was decided that local governments, companies and factories will pay their employees 50% of the payment in digital renminbi.
Each company must enter into an appropriate agreement with a local bank that pays salaries to its employees. The Chinese government has identified 4 state-owned banks, which are included in the testing program for these subsidies. To charge money, the company must open e-wallets for all employees. The Chinese government has allocated time until the end of May to implement all the measures announced.
Digital Yuan: the technical side of DC/EP
Comprehensive information about what technological features the digital renminbi will have the Chinese government keeps in secret. But according to journalists, some aspects can already be traced based on statements by Alipay representatives that were made in early 2020.
According to media reports, the digital renminbi (DC/EP) will have a two-tier data protection architecture. Thanks to this, any bank that has a license has the right to issue digital currency. It is also assumed that all banks that will use the digital renminbi will have reserves in the Central Bank of China.
Alipay representatives are convinced that users can not worry about the new payment format. The developed payment system provides high security and data privacy due to encryption.
The Chinese government has not yet officially confirmed the direction in which the digital yuan will be tested. According to current assumptions, the digital yuan will be used to pay for transportation costs.