Digital Currency

Auto Added by WPeMatico

China’s digital yuan tests leap forward in Shenzhen

Shenzhen, known for its maker community and manufacturing resources, is taking the lead in trialing China’s digital yuan.

Last week, the city issued 10 million yuan worth of digital currency to 50,000 randomly selected residents. The government doled out the money through mobile “red envelopes,” a tool designed to digitize the custom of gifting money in red packets and first popularized by WeChat’s e-wallet.

The digital yuan is not to be mistaken as a form of cryptocurrency. Rather, it is issued and managed by the central bank, serving as the statutory, digital version of China’s physical currency and giving Beijing a better grasp of its currency circulation. It’s meant to supplement, not replace, third-party payments apps like WeChat Pay and Alipay in a country where cash is dying out.

For example, the central government may in the future issue subsidies to local offices by sending digital yuan, which can help tackle issues like corruption.

Shenzhen is one of the four Chinese cities to begin internal testing of the digital yuan, announced a government notice in August without going into the specifics. The latest distribution to consumers is seen as the country’s first large-scale, public test of the centrally issued virtual currency.

Nearly 2 million individuals in Shenzhen signed up for the lottery, according to a post from the local government. Winners could redeem the 200 yuan red envelope within the official digital yuan app and spend the virtual money at over 3,000 retail outlets in the city.

As its next step, Shenzhen will launch a (vaguely defined) “fintech innovation platform” through its official digital currency institute, said a new central government document detailing the city’s five-year development measures, including attracting more foreign investment in cutting-edge technologies. The city will also play a key role in furthering the digital yuan’s research and development, application and international collaboration.

In April, the city’s digital currency vehicle launched a wave of recruiting for technical positions like mobile app architects and Android developers.

Shenzhen was established in 1980 as China’s first special economic zones and is now home to tech behemoths like Tencent, Huawei and DJI and innovation hubs like HAX and Trouble Maker. President Xi Jinping is scheduled to visit the city this week to commemorate the city’s 40th anniversary.

While the central bank provides logic and infrastructure undergirding the digital yuan, there’s much room for commercial banks and private firms to innovate on the application level. Both ride-hailing platform Didi and JD’s fintech arm have recently unveiled steps to help accelerate the digital yuan’s real-life implementation.

Bitcoin hits record high, worth more than ounce of gold for first time

Bitcoin reached a new high at $1,271 per bitcoin yesterday, and for the first time surpassed the price of gold per ounce, which was worth $1,235 by the end of last night. A year ago, one bitcoin was valued at $421, so it’s nearly tripled in 12 months, while gold’s price was about the same last year as it is today.

One reason for the virtual currency’s surge, according to NBC News:

One factor that may have led to bitcoin’s price surge is an upcoming decision by the Securities and Exchange Commission on whether to approve a bitcoin exchange-traded fund (ETF) proposed by venture capitalist twins Tyler and Cameron Winklevoss four years ago.

The decision, which is expected by March 11, would mark the first bitcoin ETF in the U.S. If approved, the ETF would have to buy an estimated $300 million worth of Bitcoin, potentially doubling the value of the currency.

Proponents of bitcoin, like Kelly, argue that the digital currency may be edging out gold as an alternative asset.

And another reason for the record high, according to Bloomberg:

The latest surge in bitcoin’s value has been attributed to tighter currency restrictions in countries such as China, India and Venezuela, as well as speculation about prospects under the Trump administration.

But Bloomberg reminds us that the last time bitcoin peaked in 2013 at $1,137, it then “fell 53 percent in less than a month.”

Photo by BTC Keychain

Powered by WPeMatico