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BEIJING: China has started its “first pilot test” of its state-run digital currency in four major cities, said to be promoting the development of the RMB-based trade settlement system “designed to counter weapons. of the dollar. “
The payments started in four cities, including Shenzhen, Suzhou, Chengdu and Xiong’an from mid-April. According to reports, some areas that will host the upcoming events of the 2022 Winter Olympics in Beijing will also use the sovereign digital currency, which would be the first system operated by a major economy.
A report published by China Daily stated that digital currency was formally adopted in the monetary system with part of the wages and salaries of the government and state sectors in these four cities paid in digital currency as of this month.
‘A sovereign digital currency offers a functional alternative to the dollar settlement system and mitigates the impact of any sanction or threat of exclusion at both the country and company level. It can also facilitate integration into the globally traded currency markets with a reduced risk of politically inspired disruptions. “
‘The stability of the Chinese yuan during the COVID-19 crisis has improved its attractiveness to many investors. These two settlement systems, the US dollar and China’s digital sovereign, can operate side-by-side or, if necessary, mutually exclusive. “
Third The third impact of any U.S. withdrawal from trade and China’s commitment is to strengthen the Belt and Road Initiative (BRI) as an advocate of free trade and free trade in bullying behavior by large nations that care little about interests of others. The BRI is alive and well with a continuing push to establish an alternative to trade and exchange structures dominated by Western protectionist markets. “
State-run media outlet China Daily said it had been formally adopted into cities’ monetary systems, with some government employees and public servants receiving their wages in digital currency starting in May.
The currency would be used to subsidize transportation in Suzhou, but in Xiong’an the trial focused mainly on food and retail, Sina News reported.
Some reports also claim that companies like McDonald’s and Starbucks have agreed to be part of the trial, however, in a statement, Starbucks told the Guardian that it was not a participant. McDonald’s has been contacted for comment, The Guardian reported.
Many digital payment platforms are already widespread in China, such as Alipay, owned by Alibaba’s Ant Financial and WeChat Pay, owned by Tencent, but were not seen as an alternative to the newly launched state digital currency.
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