China started ramping up trials with the digital yuan last April, when it ran a pilot program that reportedly included US companies like McDonald’s and Subway. Unlike decentralized cryptocurrencies like bitcoin, however, China’s digital currency would be controlled by the country’s central bank.
The experiment is part of China’s push towards a cashless society, with the idea that digital currencies can be more easily controlled and monitored than hard cash or bitcoin-like cryptoocurrencies. Digital payments that pass through companies like TenCent and AliPay are already very popular in the country.
China’s digital cash trials has caught the attention of other nations in the region. The Bank of Japan just announced plans to start experiments with digital currency, though it has yet to release any specific details. Japan’s Finance Minister Taro Aso recently expressed concern over digital cash, saying it could pose a threat to the current global reserve currency system.