February 20, 2024

China tests digital yuan in two cities

China tests digital yuan in two cities

The People's Bank of China, the country's central bank, will begin testing its digital currency for electronic payments (DC/EP) in the cities of Shenzhen and Suzhou in late 2019.

Local newspaper Caijing reported that the PBOC has partnered with seven state-owned enterprises, three telecommunications companies and four private banks to launch the pilot project.The Central Bank motivated the project participants to develop their own implementation strategies.

The pilot program will affect the spheres of transport, education, trade and medical care.banks also decided to partner with telecommunications companies to develop SIM cards with integrated digital wallets, while others created their own storage applications.

According to Caijing, early trials of the digital currency in Shenzhen will start at the end of this year, and in 2020 the projectwill begin to actively promote.

The DC / EP model provides forcommercial banks of the RMB, they first need to reserve the equivalent amount of fiat in the NBK. Further, citizens and companies can open wallets in these banks in order to be able to use the new electronic payment tool.

In addition to China, European countries alsostepped up work in this direction, fearing competition from the cryptocurrency Facebook Libra. Last week, the Bank of France said it would test its digital currency in the first quarter of 2020.