February 6, 2023

Central Bank of China is testing the launch of its digital currency

Central Bank of China is testing the launch of its digital currency

The People's Bank of China (PBoC) plans to begin testing its national digital currency in two cities - Shenzhen and Suzhou.

The central bank has established partnershipswith seven state-owned companies, including four commercial banks and three telecommunications giants. However, the names of partner companies have not yet been disclosed.

According to the Chinese news siteCaijing, NSC will first launch a pilot program in Shenzhen. The regulator is protesting electronic payments of digital currency (DC / EP) between the participants of the pilot project this year, encouraging them to develop their own strategies for using digital currency. From the beginning of next year, the currency will be used in the transport, educational, trade and medical sectors.

The project assumes that banks will receivenational digital currency against a reserve in RMB. Further, financial companies will distribute DC / EP to registered digital wallets of individuals, retailers and other enterprises. The national cryptocurrency will also be available through the WeChat messaging app and will work with the Alipay app.

China initiated the process of developing a national cryptocurrency in 2014, but unexpectedly accelerated the pace in mid-2019 after the loud announcement of Libra from Facebook.

Along with China, the central banks of other countries also plan to introduce digital currency. Most recently, the head of the Bank of France announced a bank plan to issue a digital euro.