Digital yuan pilot testing is moving to Southern China. The central bank digital currency’s latest test will be in Hainan province. The People’s Bank of China has partnered with a local bank and the municipal government to conduct the digital currency pilot. The Chinese central bank continues to test the digital yuan in various Chinese cities as it braces for a possible 2022 launch.
PBoC has partnered with local banks to test digital yuan.
The People’s Bank of China has already conducted pilot tests in Beijing, Shenzhen, Suzhou, and Shanghai. As reported earlier, the central bank has also partnered with the Hong Kong Monetary Authority to test cross-border payments between Hong Kong and the neighboring Guangdong Province. In its latest test, the central bank has partnered with the Industrial and Commercial Bank of China’s Haikou branch and the Sansha city municipal government. The PBoC will specifically target Yongxing Island in Sansha city to experiment and promote the digital yuan. The central bank will give away 99 yuan ($15) for every 100 yuan purchase on the island, which is home to thousands of people. This will include all purchases in supermarkets, restaurants, and hotels.
Central banks continue to explore CBDCs.
China is currently leading the CBDC race. However, some of its neighbors are waking up to the possibilities such a currency has. As reported earlier, the Bank of Japan has revealed its plans to start experimenting with its national digital currency starting next year. The central bank of Sweden also published its first phase of the CBDC study. The massive rally that bitcoin witnessed this year has put governments all over the world on alert as central banks try to explore CBDCs to ward off the competition from digital currencies.