China’s inbound central bank digital currency will see its very first real-world test on DiDi, the ride-hailing behemoth that deemed as the Chinese version of Uber. DiDi will trial digital yuan as a payment system on its mobile transportation platform.
Digital Yuan Real-World Application Begins
Ever since China announced plans for its state-backed digital currency back in 2019, the cryptocurrency community has been closely monitoring the progress. In April this year, China launched the first stage of the trials with partners like Starbucks, Subway, and McDonald’s, but the testing was limited to four main cities in the nation.
Now, China is proceeding with the next phase of its sovereign digital currency by working with DiDi, a ride-sharing app that is backed by Softbank, Apple, Tencent, and Alibaba, Bloomberg reports. In particular, the research institute of the People’s Bank of China (PBoC) has collaborated with DiDi to speed up the test of China’s digital currency, dubbed Digital Currency Electronic Payment (DC/EP). The main purpose of this partnership is to trial the digital yuan as a token on Didi’s ride-hailing platform.
Notably, China has been characteristically tight-lipped about when it intends to officially roll-out the digital yuan. However, sometime in April, an official at PBoC hinted that the central bank is planning to have the digital yuan ready for use during the Winter Olympics to be held in Beijing in 2022. Suffice to say, a successful trial with DiDi will set the stage for the final launch.
How DiDi Could Help The Digital Yuan Gain Considerable Traction
DiDi boasts a reach of more than 550 million users in China. This is approximately 40% of the country’s entire population. And with such a massive customer base, DiDi is poised to boost the acceptance of the digital yuan.
Moreover, the trials will not be limited to only the commuters. DiDi also has a food app that is the equivalent of Uber Eats. The firm is currently making efforts to attract more grocery shoppers and merchants onto its platform. These people will also be involved in the testing of China’s digital coin.
In light of China’s progress with its digital currency, other central banks will have to step up to the plate. PBoC has in the past revealed the intention to push the digital yuan to the rest of the world, which could inadvertently stir up conflict with other countries.