China may test digital yuan on country’s biggest food delivery app

The People’s Bank of China may test its sovereign digital currency on a popular food delivery service run by Meituan Dianping, a platform with 450 million users in hundreds of cities across the country.

The firm has already started talks on the matter with a special department of the central bank, Bloomberg reported on Wednesday, citing sources. Meituan Dianping may expand the trials to 2,800 cities and counties where it functions. However, it is unclear if testing will be limited to several cities as the terms of the deal have not been finalized yet.

If the plan moves forward, Meituan could become the second online giant participating in the mass testing of digital currency electronic payment (DCEP). Earlier this month, Chinese ride-hailing giant Didi Chuxing revealed that it may become one of the first corporate users of a government-backed virtual currency. Both apps have nearly half a billion users.

Meituan, backed by Chinese tech giant Tencent, is the leader in China’s food delivery industry, with a reported market share of over 65 percent. The company hosts billions of dollars in daily transactions, offering various services from food delivery to travel bookings and movie tickets.

Beijing has been working on the digital yuan for six years, and is believed to be very close to issuing the virtual currency to the general public. While limited trials are already underway in several cities across the country, the central bank earlier revealed that it wants it to be ready by the 2022 Winter Olympics.

The digital yuan will be linked to the holder’s smartphone number, with transactions taking place through an app. Users will be able to transfer money between accounts by tapping phones, much like having physical cash change hands. The currency will be legal tender, so it could be exchanged without needing a bank as an intermediary.

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