As the technology war between China and the United States rages on, the Asian country is rushing to implement the digital yuan to win a race that also involves finance. According to a recent publication backed by the People’s Bank of China (PBOC), the nation should become the first to issue its digital currency as part of its effort to internationalize the yuan and reduce global dependence on the dollar-based economic system.
“The issuance and circulation of digital currency will bring great changes to existing international finance. China has many advantages and opportunities in the issuance of fiat digital currencies, so it should accelerate the pace to be the first, ”stated an article published in China Finance, an official PBOC magazine, seen by Reuters.
The publication envisions that efforts to issue sovereign digital currencies will become in a kind of “new battlefield” of competition between countries, which will generate great changes in international finance.
According to the article, China also needs establish a new network of payment systems to break the monopoly of the dollar as a key part of the internationalization of the yuan. It adds that the PBOC’s digital currency research institute, as of April, had filed 130 patent applications related to the digital yuan. All this as part of the functions that would form a complete supply chain to support the launch of its Digital Currency / Electronic Payment (DC / EP)
As China establishes more and new alliances with trading partners, it will surely try to impose new technological standards with its digital yuan. However, the Asian country shows that, in the first place, it tries to solve all the aspects of its DC / EP system in the domestic market before jumping to the international market.
In that quest to ensure that the digital currency works without errors, the Institute of Research and Digital Currencies of the PBOC has carried out tests in various cities and yesterday announced a strategic cooperation agreement with JD Digital Technology, one of China’s leading e-commerce sites.
The objective of the agreement is to promote the development of mobile applications and blockchain platforms, as well as to encourage the creation of wallets that support the digital yuan, such as they report the Chinese media.
Previously, Didi Chuxing, known as the Chinese Uber, also partnered with the Central Bank of China to experiment with the digital yuan for use in the transportation industry. The Asian ridesharing giant registers some 30 million transfers a day and its platform has 550 million users.
According to the recent publications of CriptoNoticias, the Ministry of Commerce of the Asian country issued a notice on August 14 announcing the expansion of the digital yuan tests to 3 new regions, in addition to those where the pilot plan is already running. Also state commercial banks have begun to try a digital wallet, like the Construction Bank of China that a few days ago activated a wallet for the digital yuan, but disabled it hours after its mobile application before the large number of users who would have requested it.