China launched tests last year on a national digital currency, which would be widely used in the country. It will not permanently replace cash, at least not in the near future, but it will come as an alternative. While until now it was possible to pay with virtual currency only for transport and only in certain state institutions, but recently, the payment with Chinese virtual currency was started on a very popular online store: JD.com.
China’s virtual currency is now available for online shopping
At the moment you cannot exchange yuan into digital yuan and the currency is not even found at the exchange offices. The only holders of the Chinese virtual currency are a few citizens of Suzhou, who were chosen through a random lottery process. They receive the virtual currency on their personal card and can now shop online with it.
The digital yuan is not exactly a traditional cryptocurrency. That’s because it doesn’t work in a decentralized way, just like Bitcoin, for example. The Chinese currency is controlled by the People’s Bank of China, and the purpose is to control money in order to avoid fraud and money laundering, a problem that the Chinese government considers serious.
Many of China’s payments are already digital anyway, with QR code payment systems being the most popular now in this country. Very important in this situation is that the digital yuan is based on a proprietary technology, which does not depend on foreign technologies.
There are already similar initiatives in other countries such as Japan and Venezuela, and it is likely that the successful implementation of this virtual money technology could encourage other countries to adopt a similar strategy.
In addition to these “state” virtual currencies, other initiatives such as Diem on Facebook (formerly Libra) will try in the future to offer an international payment solution.
Robert J. Smith is still early into his career as tech reporter but has already had his work published in many major publications including JoyStiq and Android Authority. In regards to academics, Robert earned a degree in business from Fordham University. Robert has passion for emerging technology and covers upcoming products and breakthroughs in science and tech.