The Central Bank of the People’s Republic of China electronic Chinese yuan is now being tested in major cities such as Shenzhen, Shanghai and Beijing.
Early last year, China started out in four cities namely Suzhou, Chengdu, Xiong’an and areas that will host some of the events for the 2022 Beijing Winter Olympics, recently expanded the testing phase to bigger cities such as Beijing and Shanghai.
This new development comes at the moment where many countries have taken action to introduce their digital currencies to keep up with the pace of change of technology and secure their financial systems especially as cryptocurrencies such as Bitcoin are increasingly becoming popular and recently soared in value.
This new form of currency being developed by central banks across the world will replace the use of physical cash also known as Central Bank Digital Currencies(CBDCs) will improve the financial inclusion of the unbanked and those that are excluded from conventional banking services.
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Unlike Bitcoin and many other digital assets which are designed to be decentralised allows several entities to hold copies of transactions history without being controlled by a central source, while digital currencies created by central banks give governments more financial grip and are able to track financial transactions of individuals.
With China being ahead of a national digital currency means it digital currency will become a new battlefield of competition between other sovereign states like the United States.
In the last 12 months, more than 60 countries have experimented with national digital currencies according to the Bank for International Settlements.
