The People’s Bank of China (BPC) has completed the second phase of the pilot tests it has conducted with the digital yuan, China’s official cryptocurrency.. In this second attempt, twice the number of people living in the city joined and tripled the number of businesses.
In December of that year, Suzhou City issued 20 million digital currencies, about $ 3.1 million. It did so through the lottery, and one in 100,000 winners received 200 digital yuan that could be used for online or in-store purchases. Likewise, various establishments offered attractive discounts for those who used the cryptocurrency.
For their part, the tax authorities have formed alliances with other technology companies such as Didi Chuxing Technology Co. and Meituan to test the digital yuan to conduct other types of operations such as food delivery and private transportation. which had already started in July of this year. According to the data provided by the JD.com website In the test carried out in Suzhoun, around 20,000 trades in digital yuan were registered in the first 24 hours of the test.
One of the highlights in this system is a new form of electronic payment via offline transactions, meaning they do not require an internet connection. The authorities believe that the offline function, unlike services like Ant Group or WeChat Pay, can offer great advantages for regions that do not have an efficient internet connection, as a simple touch between devices creates operation. In addition, there are no transaction costs as with the above services. This is also useful for institutions as they can receive payments more efficiently than other services which occasionally prevent them from receiving payments due to poor network connectivity that may occur.
The development of the digital yuan for China is starting to be very beneficial to the economy as it presents an opportunity for cost savings on commissions. The tests started in 2014 and one of the main goals is to replace the currency in circulation.