February 5, 2023

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 Shenzhen and Suzhou at the end of 2019.

Local Caijing publication reported that to launchThe NSC pilot project began to collaborate with seven state-owned enterprises, three telecommunications companies, and four private banks. The Central Bank motivated project participants to develop their own implementation strategies.

The pilot program will affect the field of transport, education, trade and medical services. Some 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, the early tests of digital currency in Shenzhen will start at the end of this year, and in 2020 the project will be actively promoted.

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.