The government of China is reportedly pressuring the management of the American fast-food chain McDonald’s to accept the new digital yuan as a form of payment in their restaurants before the Winter Olympics in February 2022.
This was revealed by the Financial Times.
Other giants such as Nike and Visa are said to be under the same pressure.
China to launch digital yuan
The Chinese government seems to be aiming to launch its digital yuan in grand style at the Winter Olympics in Beijing in February.
McDonald’s already accepts the new digital renminbi in some of its restaurants in Shanghai, but now the Beijing government would like to see it adopted throughout the country.
A US company spokesperson told Business Insider newspaper:
“Currently customers can use digital RMB in McDonald’s restaurants in Shanghai, our pilot city where we will learn from customers’ response. Accepting digital RMB is a business decision made with customer interests in mind, and there is no pressure to do so”.
To the Financial Times Darrell Duffie, co-head of an e-renminbi, a project run by Stanford University’s Hoover Institution added:
“I always assumed large US firms would be put under pressure to provide weight to the digital renminbi, because most large retailers will be put under pressure and American firms won’t be exempted”.
The digital yuan
The digital yuan is China’s new CBDC, whose pilot project has already started in a large area of the country months ago.
According to many analysts, China’s ban on all activities related to traditional cryptocurrencies is also intended to launch the digital renminbi, which could be the world’s first digital state currency.
China Construction Bank (CCB) and Bank of Communications (Bocom) have been testing China’s CBDC for investment funds and insurance services for the past two months.
In the tests carried out in the past months, digital state yuan have been distributed to about 10 million Chinese citizens.
For the government, the Olympics would be the ideal time to launch the digital state currency, which Chinese authorities say could challenge the dominance of the dollar in global markets.
The new challenge for CBDCs
Many countries (around 80, including the EU) are already planning to launch digital state currencies in a few years’ time.
China seems to be well ahead of all other countries with its digital currency, which has reportedly already passed many tests in recent months.
The United States, on the other hand, does not yet trust the world of cryptocurrencies because it probably thinks that digital state currencies could harm the US dollar and thus its economy.
The Federal Reserve Chairman explicitly stated in September that the US is not considering a CBDC of its own for the time being.
It is hard to imagine that this position could be maintained should China accelerate its project and launch the digital yuan in a few months.
The economic supremacy of the future will inevitably also depend on digital innovation in the financial system.
As the Bank for International Settlements recently argued, cryptocurrencies will sooner or later have to be dealt with by all central banks.