China becomes first major economy to launch digital currency

The Chinese government has begun to issue blockchain-powered digital currency to its citizens, according to a report by The Wall Street Journal.

The Wall Street Journal reports that 750,000 recipients have been determined by a lottery system and can already spend their digital Yuan in stores and online using a special app.

China is only the second country and the first major economy to officially launch a blockchain version of its own currency

According to a report, 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.

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.

According to Bloomberg, the sand dollar of the Bahamas Central Bank launched last year and was already being accepted in stores in the capital Nassau. Bloomberg identifies four more countries – South Africa, India, Pakistan and Thailand, with concrete plans to launch their own official cryptocurrencies soon.

Cryptocurrencies such as bitcoin have foreshadowed a potential digital future for money, though they exist outside the traditional global financial system and aren’t legal tender like cash issued by governments.