Starbucks and McDonald’s are reportedly among 19 restaurants
and retail shops that will be involved in testing China’s central bank
digital currency (DCEP) in the country’s Xiong’An new district. The
move signals China’s wider efforts to test the digital currency
project, with state-owned commercial banks already developing
wallet applications for the digital yuan, also known as DC/EP.
The DCEP, used for consumption only in the first phase, works in
the same way as a consumption coupon. On top of traditional
payment applications such as Alipay and WeChat Pay, users will be
able to pay by DCEPs in their DECP wallets. The DCEP will provide
a more direct and effective monetary tool for PBoC to provide
financial support to certain industries. A wider use of DCEP makes
monetary easing more feasible in a broader context. The cost of
monetary easing will become lower but the efficiency will be
higher. The introduction of DCEP is expected to challenge the
oligopoly of Tencent and Alibaba in the digital payment space.
The key advantage of DCEP is that the payment does not require
an internet connection, which indicates the potential for broader
use in remoted areas of China.
https://www.coindesk.com/starbucks-mcdonalds-among-19-firms-to-test-chinas-digital-yuan-report
