With the full introduction of the digital yuan looming, China is reportedly pushing to expand a pilot program in the McDonald’s fast-food chain.
According to sources cited by the Financial Times, China has told McDonald’s fast-food chains to expand the trial version of its digital yuan payment system ahead of the Beijing Winter Olympics.
The country’s central bank’s digital currency (CBDC), known as digital yuan, e-CNY, e-RMB, e-renminbi and DCEP (digital currency, electronic payments), is currently being tested before the full-scale rollout planned to be held around the Olympic Winter Games in Beijing in February 2022.
As part of the pilot program, digital yuan wallets are currently being tested as a means of payment at 270 McDonald’s stores in Shanghai.
Now, according to FT sources, the Chinese government is urging the company to introduce a wider payment system and pressure other retailers, including Nike and Visa, to follow their suit. Both Nike and Visa declined to comment, while a McDonald’s spokesman said “Shanghai is our pilot city and we will learn from customer’s feedback.”
According to a source “close to Chinese financial regulators,” the state-owned Bank of China (one of the sponsors of the Olympic Games) is behind efforts to get traders in the Shanghai area enrolled in the digital yuan program but noted that they could decline.
What is the digital yuan?
First proposed in 2017, digital yuan has been tested since 2020, and the People’s Bank of China (PBoC) sends millions of digital yuan to citizens. By July 2021, more than 20 million digital yuan wallets had been established and the country was gearing up to fully launch CBDC at the 2022 Beijing Winter Olympics.
It is currently one of the most advanced central bank digital currency projects in the world. CBDCs are similar to stablecoins in that they are linked to a fiat currency.
They differ from cryptocurrencies in that they are typically not based on a decentralized blockchain, and the ledgers that record transactions are controlled by the central bank in question. Indeed, some analysts argued that China’s summer bitcoin action in 2021 was at least partly motivated by the desire to keep the decentralized rival to the digital yuan in check.
Overseas, the response to China’s digital currency efforts has been mixed. In the US, a trio of senators called on the US Olympic and Paralympic Committee to “prohibit US athletes from receiving or using digital yuan at the Beijing Olympics,” citing its potential to be used to spy on Chinese citizens and visitors to the country.
Meanwhile, supporters of the “digital dollar” called on the US to push through its own CBDC to keep “the important role of the US dollar in the global economy.”
22-10-2021, Mr Advice TEAM