China’s Shenzen is leaving no stones unturned in conducting the tests of the digital version of the yuan, the official currency of the country.
During the previous week, the government within Shenzen picked up 50,000 citizens just like that within the city. It provided them with a total of around 10 million yuan digital currency via the mobile “red envelope” tool, which contains a mechanism of digitizing the entire money gifting process within red-colored pouches. This entire custom came into existence owing to the usage of e-wallet within the WeChat app.
The digital yuan is nothing close to any cryptocurrency, in which currency is generated by employing a few encryption techniques. The entire currency issuance is managed and coordinated by the central bank. Hence, it is equivalent to the digital form of the actual yuan currency. These steps taken would help Beijing in its digital currency distribution. The digital currency distribution would boost other payment apps WeChat Pay and Alipay, which belong to third-parties. The introduction of digital currency is very beneficial for a country where cash is on the verge of becoming extinct.
With digital currency in place in the upcoming days or months, issuing subsidies to local centers would be highly simplified for the central government as they can easily provide digital money to these people. These methodologies would come as a great help in curbing issues like corruption and other malpractices.
Sometime in August, China’s government had put forth an announcement stating that the digital yuan testing would be conducted within four cities of China, out of which Shenzhen would be one. Other than this, no other details were posted. Shenzhen is the first city to have distributed digital currency amongst its residents for testing purposes. In fact, this has been marked as the first instance of digital currency testing being done on a large-scale basis.
A local government post stated that about 2 million people residing in Shenzen had registered for the lottery. People winning this could make effective use of the 200 yuan red envelope with the digital yuan app’s help. About 3000 retail outlets within Shenzen would be accepting virtual money procured by winning the lottery.
What would be next for Shenzen?
Furthermore, Shenzhen would be introducing the “fintech innovation platform” via its officially registered digital currency center. This information was mentioned in the latest copy of the central government document, which stated the details regarding what all the city is planning to do in the next five years. Shenzen also has plans to bring in more international funds to boost cutting-edge technologies. Shenzhen would play a pivotal role in taking forward the research and development of digital yuan. It would also play a key role in its application and foreign collaboration.
To promote the activities surrounding digital yuan, Shenzhen went about on a recruiting spree in April this year to find the correct fit for the positions for mobile app architects and developers specializing in creating Android-related software and applications.
In 1980, Shenzhen became one of the first cities in China to specialize in the economic field, and it attained the tag of being a “special economic zone” within the country. Currently, it houses a large number of tech organizations like Tencent, Huawei, and DJI. Apart from these, innovation specialists like HAX and Trouble Maker are also located in Shenzen. President Xi Jinping would be visiting the city this week to celebrate its 40th anniversary of being established as a special economic zone.
Recently, ride-hailing services like Didi and JD’s fintech branch have taken a few steps to carry out the actual digital yuan implementations within their systems.
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