The US chains McDonald’s, Subway and Starbucks will join 16 local businesses participating in a pilot program for China’s upcoming digital yuan, state-backed media reported.
The People’s Bank of China (PBoC), the country’s central bank, has been developing a digital currency over the past few years. Not much is known about its exact design, but it is not expected to resemble bitcoin, which supports anonymity and is inherently decentralized, making it highly resistant to state control.
The digital yuan will be issued by the PBoC with the apparent aim of making digital payments easier and faster.
The American giants will be joined by local hotels, convenience stores, a stuffed bun shop, a bakery, a bookstore and a gym, according to details revealed at a promotional event in the Xiong’an New Area on Wednesday, a city being built south of Beijing, the South China Morning Post reported.
Launched in 2017, Xiong’an New Area is President Xi Jinping’s personal project. Xi emphasized in a speech on Thursday that the country would step up development of 5G, artificial intelligence and other technologies at a massive scale known as “new infrastructure,” CNBC reported.
The announcement of that pilot program, which appeared to focus on retail and catering, follows another recent test in Suzhou where the digital yuan was being used to give subsidies to local workers for transport.
Further tests will be done in Shenzhen and Chengdu and ahead of the 2022 Winter Olympics in Beijing, the PBoC said, according to Xinhua News.
The central bank made clear that the digital currency has not officially launched.
Earlier this month, a screenshot circulated on social media purporting to show a new app from the Agricultural Bank of China which will allow users to use the digital yuan.
There was some concern that the coronavirus pandemic had derailed the PBoC’s digital currency plans. But earlier this month, an official at the bank told reporters that it was pushing ahead with its original plan.
Central bank-issued digital currencies have gained momentum recently. Monetary authorities look to innovate in the face of competition from China and Facebook’s digital currency called libra, which since it became public, has run into a number of problems. Other central banks around the world including the UK and Japan have been assessing what their own digital currencies might look like.
But China appears to be ahead of the pack. One of the potential benefits of the digital yuan, experts previously told CNBC, is that it could help internationalize the yuan. Hence there have been rising calls within the US for the Federal Reserve to speed up development of a digital dollar.