China to launch pilot digital currency program in some cities

Cornelia Mascio
Agosto 16, 2020

China's commerce ministry said on Friday that it will launch a digital currency pilot programme in some cities.

The recent extension of the digital yuan trial also followed the PBoC's decision to circulate the digital yuan in Hong Kong's Greater Bay Area consisting of nine cities including Guangzhou, Shenzhen, Hong Kong, and Macau.

According to anAug 14 report by the Wall Street Journal, there is not yet a set time when the broadened pilot program of the Chinese CBDC will start.

Cities in central and western China may also undertake the trials if they meet certain conditions, the ministry said, without specifying what they were. Looking back into July though, reports from the South China morning post indicated that the country was launching its own digital currency as an alternative payment option to Alipay and WeChat pay.

China has been ramping up plans and testing for the People's Bank of China digital currency in recent months, an initiative that some see as a threat to cryptocurrencies like Bitcoin and even potentially someday to the US dollar's dominance. Screenshots of the new currency's wallet app, made by Agricultural Bank of China Ltd., have circulated widely online, showing a variety of functions, including allowing savers to track transactions of the new currency and link the wallet to their existing bank accounts.

Meanwhile, Switzerland-based Bank for International Settlements conducted a survey in 2019 that found that as many as 80 per cent of the world's central banks have shown interest in the idea of developing a sovereign digital currency.

Like previously stated, the digital Yuan testing has been ongoing for a while now, but this new move will see the digital currency launched in a more developed area than the previous locations. The PBOC has been doing research into a digital currency since 2014.

In Friday's statement, the Commerce Ministry said the government's efforts to encourage innovation, such as broader use of the digital currency and artificial intelligence, are aimed at moving China into higher-value industries and upgrading the country's economy.

Liyan Qi contributed to this article.

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