BEIJING (CU)_In a first for a major economy, people in China can now make payments for their meals at McDonald’s and Starbucks using a digital currency. However, this facility is not provided for Bitcoins or any other cryptocurrency, except the digital Yuan introduced by the Chinese government.
According to the Wall Street Journal, Beijing has begun issuing the blockchain-powered digital currency, and has used a lottery system to determine the first 750,000 recipients who could spend their digital Yuan online, as well as in stores, using a special app.
Accordingly, Starbucks and McDonald’s are among those already accepting the currency, and since app-based payments are commonly used in brick-and-mortar businesses in China, merchants were able to easily adapt to the government’s new offer.
Given the tight government surveillance that is prevalent on the wide range of digital payment systems offered in the country, the Chinese Communist Party already has a plethora of payment data available with them.
Therefore, many believe that the launching of the digital Yuan will only grow the government’s knowledge on how people spend money, although China’s Central Bank has pledged to create what it calls “controllable anonymity” in order to limit traceability.
Experts say that the Chinese government would eventually expand the amount of digital currency available in the future, thereby bringing down the amount of physical currency available. The possibility of making all Yuan digital at some point also cannot be disregarded entirely.
Nevertheless, China is only the first major economy to launch a blockchain-powered currency, as the Bahamas was the first country in the world to launch what is called the digital Sand Dollar, according to Bloomberg. This currency is currently being accepted in stores in the capital city of Nassau. Meanwhile, India, South Africa, Pakistan and Thailand have also initiated concrete plans to launch their own official digital currencies soon.
