The People’s Bank of China (PBoC) is about to conduct the first real world trials of its central bank digital currency (CBDC) in at least two cities in the country, local financial news outlet Caijing reported on 9 December.
According to the report, the country’s central bank is “expected” to start the tests of its digital yuan in Shenzhen and Suzhou at the end of 2019. The outlet noted that the digital currency will be applied in real world scenarios, such as transportation, education and healthcare.
The article continues:
“Compared with the previous pilot, this time the central bank’s legal digital currency pilot will go out of the central bank system and enter real service scenarios such as transportation, education, and medical treatment, reaching C-end users and generating frequent applications.”
Under the guidance of the central bank, the tests will include the participation of the country’s four big banks, including the Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Agricultural Bank of China. Other participants include China Telecom, China Mobile, and China Unicorn.
The PBoC is also encouraging other banks to manage the digital currency differently, and to compete with each other, in order to secure a better model for its wider adoption in the future. As previously reported, the digital currency has been dubbed “Digital Currency Electronic Payment” (DCEP).
The real world trials of the DCEP will be conducted in two phases, with the first phase being a controlled trial, which will start at the end of 2019. The second phase will start sometime in 2020, and will see the central bank widely promoting the digital currency in the two cities. The report further says that if the trials are successful, the DCEP could be fully launched soon after they finish.
China has been developing its own digital yuan for years now, but hastened its efforts after Facebook announced that it was starting to work on its Libra project in June. The report states that the DCEP will have a similar design logic to Libra, but will not imitate the Facebook-led project.
Last week, the Bank of China also released 20 billion Yuan in blockchain-based bonds, which were meant for small businesses that have a blockchain platform. The move was aimed at stimulating the growth of small and medium-sized businesses that are developing their own blockchain solutions in the country.