China has rolled out a pilot model of an app that enables customers to retailer and pay with digital yuan, also referred to as e-CNY, as reported by the South China Morning Post. And no, the digital yuan isn’t a cryptocurrency — it was developed by the People’s Bank of China (PBOC) to interchange banknotes and cash; thus, it isn’t a decentralized type of fee, nor will it function on the blockchain.

Although it would sound like we already pay with digital money once we use a bank card or a web based fee service like PayPal and Apple Pay, the digital yuan isn’t something like that. e-CNY is basically bodily money transformed right into a digital kind, and it’s been within the works since 2014. According to CNBC, distribution of the digital foreign money will happen utilizing a two-tier system that transfers e-CNY from the PBOC to business banks. Banks will then distribute the foreign money on to shoppers.

Since the e-CNY isn’t a decentralized foreign money like bitcoin and different cryptocurrencies, it doesn’t promise the identical sort of privateness. The Deutsche Bank says it is going to have “controlled anonymity,” that means customers can select to hide their identities from counterparties, however it is going to nonetheless let the authorities monitor transactions for unlawful actions like cash laundering.

Digital fee apps like WeChat and AliPay have already got a powerful foothold in China, with round nine in 10 Chinese people saying they used both app throughout the previous 12 months. It might sound unlikely for the Chinese to wish to change over to the digital yuan, however China has been working onerous to put it on the market. Within the previous two years, cities all through China have even been holding lotteries, distributing a complete of 10 million digital yuan (worth about $1.47 million USD at the time) to folks in Shenzen in October 2020, 20 million digital yuan (or ~$3 million USD) in Suzhou in December 2020, and 40.2 million digital yuan (or ~$6.2 million) in Chengdu in February 2020.

Last September, Bloomberg coated a commerce truthful in Beijing, the place attendees have been proven how to join an account, in addition to the various methods to make use of the digital foreign money — this contains wearables that customers can faucet towards scanners to pay with e-CNY. As famous within the report, customers can replenish their AliPay account with the foreign money, which suggests each types of fee might need extra of a symbiotic relationship fairly than a aggressive one.

Bloomberg even describes how some banks on the occasion demonstrated how foreigners might join an e-CNY account utilizing their passport and telephone quantity, in addition to convert international foreign money to e-CNY. As we get nearer to the 2022 Beijing Winter Olympics, this can be a approach for China to leverage the foreign money as a approach for guests to simply make funds.

The new e-CNY app is obtainable on each China’s Android and Apple app shops, however solely folks in 10 particular cities, together with Beijing, Shenzen, Chengdu, and Shanghai, can use it. And as identified by CNBC, the app might be out there to make use of throughout the upcoming Olympics.