China’s DCEP Lands in Beijing for First Real Life Use
After the trial phase in Suzhou as an upgraded version of the Shenzhen pilot and two major banks – Postal Savings Bank of China and Bank of Communications – joining the experimentation, China’s digital currency and electronic payment (DCEP) project has reportedly found its way to Beijing.
Reports have it that the digital yuan test is ongoing in the southwestern Fengtai District of Beijing where coffee chain, Mancat Café, launched it on Tuesday.
Mancat’s customers’ being able to scan the digital yuan payment QR code at its coffee shop in the Lize Financial Business District marks the first time the application of China’s digital currency will be recorded in the capital city, Pan Daily reports.
It adds that the Beijing test is coming as the Suzhou version ended on Dec. 27 after a two-week trial which saw 96,614 residents awarded the lottery-based red packets. It is also the first real life use of the digital currency in China, according to local reports.
DCEP (Chinese Digital Currency) disclosed its first landing scene in Beijing for the first time: a coffee shop called Mancat Coffee. It has been tested in Shenzhen, Suzhou, Chengdu and other places before. The per capita consumption is about $6. pic.twitter.com/nh978IJXe7
— Wu Blockchain (@WuBlockchain) December 29, 2020
DCEP to take on the world on a low scale?
The reported real life use in Beijing follows a low-scale uptake approach as Mancat is a small, low-end, low-grade local coffee chain, according to a crypto journalist known as Wu Blockchain, as opposed to the main coffee shops in China like Starbucks, Costa and Luckin.
Meanwhile, the DCEP continues to be tipped to have an impact on the global economy once rolled out though a former governor of the People’s Bank of China (PBoC), Zhou Xiaochuan, says it may not pose any threat to global monetary systems.
With a projection that China’s economy will overtake the United States’ by 2028 as well as other developments, there is a view that the digital yuan will likely mitigate the US dollar trap, accelerate internationalisation of the yuan and offer an escape route from dollar-based sanctions.
Also, a journal article points out that the PBoC’s effort to internationalise the yuan through a digital version to reduce the dominance of the US dollar could see ASEAN be the first region to drive the international usage of the e-yuan due to member countries’ deep connection with China’s economy through trade, investment, travel and people-to-people links.
China opens up blockchain
Another developing story is the suggestion of a link about to be established between blockchain and central bank digital currencies (CBDCs) – probably in the event the base technology used for such a currency is different.
The recent comment by He Yifan of Red Date Tech, the company behind China’s Blockchain Services Network (BSN), that the BSN is working on two projects to build infrastructure for CBDCs and stablecoins will make blockchain use easier for related projects without buying cryptocurrencies. and its associated risks.
He’s hint comes as adding or modifying items related to blockchain development made the 2020 list of industries in which China wants to encourage foreign investment. The Catalogue of Industries Encouraging Foreign Investment (2020 Edition) jointly released by China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce on Monday will take effect Jan. 27.
With China at the forefront of CBDC development and has recently been reported ranked the first in the world for blockchain patent applications, China enlarging the scope of investment by foreigners with the revised catalogue indicates an opening up to a resolve of high quality development that would see new players join the country’s blockchain industry as well as its related markets.
Olusegun Ogundeji writes on tech-related issues including from the crypto/Blockchain space.
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