China Unleashes Digital Yuan on American Businesses
Among the ventures that have agreed to participate include Seattle-based coffee king Starbucks, as well as fast food restaurants like McDonald’s and Subway. Starbucks is interesting in that the company has long been a heavy advocate of crypto. It was one of the first enterprises to join hands with Bakkt, the institutional crypto trading platform owned and governed by the Intercontinental Exchange (ICE).
Through the program, people would be able to purchase Starbucks drinks and pastries using cryptocurrency. Now, it looks like the company wants to do the same with Chinese consumers.
The process is all part of a pilot program. Thus far, about 19 separate companies are participating. Developed by the People’s Bank of China (PBOC), the currency will be compatible with applications such as WeChat Pay and Alipay and will allow people to purchase goods and services using their mobile devices.
As dandy as this all sounds, the currency has given rise to many questions and concerns since it was first announced in late 2019. Many are wondering what the Chinese government is planning to do with the financial information of the coin’s users. Will it use this data to spy on residents? What can be gained from learning more about their spending habits?
Despite all these issues, several reps for the coin have emerged to explain that the coin will not be used to spy on people, and that the project is specifically designed to lessen reliance on paper money, which is subject to inflation and other financial problems.
Xinhua News Agency in China reports that the currency is not quite ready and is set to undergo a lengthy testing period that could last well into 2022. However, the coin itself has been in development for about six years, which would ultimately bring its life – from birth to conception – to a whopping eight years.
Mu Changchun – head of the PBOC – explains that the currency is a digital form of the yuan, the country’s native fiat. He explained in an interview:
The currency is not for speculation. It is different to bitcoin or stable tokens which can be used for speculation or require the support of a basket of currencies.
How Anonymous Will It Be?
In other words, the currency is not designed for investing, but for everyday purchases, thereby placing it in the exact same category as credit and debit cards, cash and checks. Changchun also says there would be a “certain level of anonymity” involved with the coin, but of course, how much anonymity is still being called into question.
Other countries to discuss the notion of a national cryptocurrency include the U.S., Iran and North Korea.