The Chinese government has begun issuing digital currency to its citizens, becoming the first major economy of the world to officially launch a blockchain version of its own currency.
750,000 recipients have been determined by a lottery system and can spend their digital Yuan in stores and online using a special app, The Wall Street Journal reported.
App-based payments are already very common in Chinese brick-and-mortar businesses, so merchants were quick to adapt to the government’s new offer. Starbucks is reportedly among those already accepting the digital Yuan, as is the Chinese Communist Party, according to a report published by Statista.
Ubiquitous digital payments and tight government surveillance have led to a plethora of payment data already available to Chinese administrators.
This knowledge on how people spend money will only grow with the implementation of the digital Yuan, even though the country’s Central Bank has said it will limit traceability and create what it calls “controllable anonymity”.
With the launch of the digital currency, every Yuan in circulation will either exist as physical or as digital currency.
Analysts expect the Chinese government to raise the amount of digital currency in the future, thereby lowering the amount of physical currency available in the market. Some even think China plans to make all Yuan digital at one point.