After the first large-scale test of China’s Digital Currency Electronic Payment (DCEP) platform in Shenzhen, China’s Ministry of Commerce has announced an expansion of DCEP tests to more cities. The test aims to determine whether the platform can candle high-volume commercial transactions for verticals, including hospitality and e-commerce payment processing. The Ministry of Commerce recently published a detailed plan for testing its DCEP in three main financial and political hubs in China. The cities include Jiangsu, Zhejiang and Anhui, Beijing, as well as the Hong Kong-Macau-Guangdong Greater Bay Area.
Suzhou will be the first city to test digital yuan.
Suzhou, a city in the province of Jiangsu, will be the first to test the national digital currency from the cities mentioned in the list. According to a source in the city that spoke with local tech and finance publication Jingji21, the city’s DCEP trial is focused on commercial transactions such as retail, e-commerce, education, and transit card top-ups. Another source said that tests in Shenzhen have pivoted in this direction as well. The People’s Bank of China has been working on the national digital currency for the last five to six years.
China is starting to test the Digital RMB and educate its citizens. 🇨🇳
This video is circulating WeChat: China's digital currency in action w/ the Agricultural Bank of China
The woman takes out 50RMB from her bank card & converts it into China's new digital RMB pic.twitter.com/Tnxf11dyo7
— Maria Shen (@MariaShen) August 19, 2020
Central banks across countries continue to explore CBDCs.
CBDCs are being explored worldwide, with 80% of the world’s central banks believed to be investigating their potential. Several central banks have made noticeable progress in this area as they approach the final stages of issuing a CBDC. China is set to become the first major nation to issue a national digital currency dubbed DCEP.
An earlier report by the Bank for International Settlements had noted that the ongoing Covid-19 pandemic had amplified the need for central bank digital currencies. As reported earlier today, the former governor of the Reserve Bank of India, Dr. Raghuram Rajan, opined that bitcoin and CBDCs could work alongside each other.