Chinese companies are working closely with Beijing on the digital yuan

According to reports, China’s key companies, Ant Group, Bank of China and JD.com, are heavily involved in the development and testing of the digital yuan (DC/EP). Indeed, Jack Ma’s corporation, Ant Group, has been supporting DC/EP development on a long-term basis since 2017.

In January 2019, the People’s Bank of China’s Institute for Digital Currency Research reportedly developed a mobile application for DC/EP, while using the platform of various mobile app developers within the Ant Group ecosystem as the basis. In July 2020, Ant Group officially began testing DC/EP, and in December of that year it launched a digital yuan experiment in Shanghai. In February, financial services provider MyBank, supported by Ant Group, became a partner in the digital yuan project.

Bank of China is promoting DC/EP in transactions for the purchase and sale of goods and services aimed at the global market. For this purpose, the organization has released a prototype DC/EP digital wallet, which involves the possibility of conversion between DC/EP and sixteen currencies of the world.

Finally, online commerce giant JD.com made transfers to DC/EP to a number of its employees in January of this year.

All of these facts suggest that Beijing is focusing on building the infrastructure around DC/EP before such a CBDC is scaled up from test use to mass transactional use.

Meanwhile, attitudes toward DC/EP in the U.S. remain mixed. Some experts see the digital yuan as a strong competitor for the U.S. dollar. Others note that the global financial system and U.S. finances could be positively impacted by the launch of DC/EP as an additional incentive for the growth of the global goods and services market.