The Chinese digital yuan is now a thing of reality. Following what has been a lengthy period of testing, the People’s Bank of China has launched approximately $1.5 million worth of the virtual currency.
The Digital Yuan Is Being Released on 50,000 People
Prior, the digital yuan was being tested through American businesses such as Subway, but now, it looks like the currency has entered a whole new phase of its development process. The currency’s pilot program saw the Shenzhen Municipal Cyberspace Administration developing a lottery amongst 50,000 people – all randomly selected – who will get part of the 10 million digital yuan pot (worth roughly $1.5 million in USD at press time).
Those who are selected will get as much as $30 worth of the digital yuan. They will then be required to spend the money between the dates of October 12 and 18 at one of over 3,000 selected retailers. Executives in charge of the pilot are being rather strict with the rules of the program and are forbidding the selected users from transferring the money to digital accounts owned by other people. In addition, the money cannot be converted into fiat currency. At the end of the trial period, all unspent money will go back to the developers to be utilized in future projects.
The situation at hand creates several questions, some of which are, “What will happen to the money’s users? Will they be spied on? Is this to get an idea of how people will utilize the digital funds? Is there an invasion of privacy at hand?” While it has been said in the past that the money will not be utilized to pry into people’s lives, this is a questionable statement. Furthermore, the money initially traveled through the funnels of American businesses, not those stationed in China, which suggests that perhaps the nation is looking to somehow hold a stronger edge over western cultures and economies.
The good news is that China has lit a fire under the competitive spirits of many nations, including the United States. As it stands, roughly seven other major banks, including the Federal Reserve and the Bank for International Settlements, have announced that they are either looking into the possibility of creating a central bank-issued cryptocurrency in the future, or have already begun working on doing so. China is not the only country engaged in such a project.
Some Other Nations Are Looking to Compete
While it may have been the first one to arrive at the financial table, others are following suit, which means the country is on the verge of experiencing some hardcore resistance and competition from large nations such as the United States.
At the same time, how far they will get along depends primarily on the ideas and speeds of regulators, many of whom have shown resistance towards bitcoin and the crypto space.