People’s Bank of China (PBoC) is planning to trial its digital yuan with food delivery giants backed by Tencent Holdings Ltd. According to a report published by Bloomberg on 15 July, the PBoC is set to boost its National Digital Currency Electronic Payment (DCEP) adoption by testing it on Meituan Dianping-controlled platforms, including Tencent’s food delivery application.
Digital yuan adoption
PBoC is currently testing its central bank’s digital currency in four Chinese cities and is closing its doors to the public. Meituan has been involved in a dialog with China’s Central Bank ‘s research arm on digital legal tender applications in the real world, based on sources that are close to the matter.
Indeed Meituan is now joining the Chinese ride-sharing startup Didi Chuxing, which has recently joined the trial program for researching digital yuan applications. Like Didi, Meituan is involved in billions of dollars of transactions every day in its food delivery business and online travel solutions. Its inclusion in the testing phase would certainly boost the mass adoption of state-issued digital currencies.
China to make history as the first country to issue a CBDC?
According to the Blomberg report, the PBoC is deliberating with Bilibili Inc, another online video streaming service supported by Tencent. The two companies that provide a range of online services in the form of food delivery to e-commerce; seem to be the perfect prospects to help DCEP win its share of China’s $27 trillion payment industry. In addition, digital yuan could sustain the government’s grasp of the world’s second-largest economy.
For about six years now, China’s central bank has been working on the digital yuan, and it’s closer than ever to make use of that to the public. Several other central banks are also testing and researching CBDCs around the world. In conclusion, it is assumed that the Facebook Libra project is the chief catalyst to why central banks worldwide have intensified their efforts to develop a state-issued digital currency.