Due to the growing popularity of digital assets, some nations have added support for digital currencies. The People’s Bank of China (PBOC), China’s central bank, announced earlier today the continuous growth of the country’s central bank digital currency (CBDC), the digital yuan.
The digital money is presently being tested in 17 other provinces throughout China as part of a pilot program. The country’s central bank stated that it plans to establish a system that would allow users to “scan with one code.” According to the report:
“The People’s Bank of China stated that in the future, it will continue to carry out innovative applications of digital renminbi to realize the interconnection between the digital renminbi system and traditional electronic payment tools, so that consumers can scan with one code, and merchants can also support various transactions without increasing costs as much as possible.”
Along with the extension of the CBDC pilot program throughout China, the country’s central bank is trying to increase the use cases of the digital yuan. The CBDC will gain two key features: offline payments and smart contract capabilities.
The offline payments functionality, which went live on January 23, will allow customers to make payments without needing to connect to the internet. NFC (Near Field Communication) technology will enable two electronic devices to communicate within a distance of 4 centimeters or less to confirm payments.
In contrast, the smart contract function, which was introduced earlier this month on the e-commerce app Meituan, allows users to win a daily reward of $1,312 that is shared among winners.
China announced plans to offer wealth management products that accept digital yuan payments in pilot areas to enhance CBDC usage from the outset. A big investment bank like China Galaxy Securities will only offer wealth management services to a select few individuals.
Furthermore, China’s central bank has been growing the CBDC’s creation over the last year. The PBOC has already implemented roughly 30 “red envelope activities” in pilot locations to promote consumption and low-carbon travel, as well as to make the digital yuan a payment mechanism with practical use for consumers.
While CBDC adoption is still in its early stages, digital assets have become a significant investment. Investors have boosted their wagers on these assets in recent weeks, bringing the global market worth beyond $1 trillion for the first time in over five months.
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