In an effort to promote the development of the central bank digital currency (CBDC) in China, several cities in the country are planning to undergo pilot testing. The digital yuan testing by the Chinese cities will help promote the use of digital currency in 2021.
In a report published on the 24th of January, Global Times revealed the cities’ plans on the pilot testing. The report also cited “observers” who said that the CBDC trial is a good start for the new year and could eventually accelerate the official launch of the CBDC.
Furthermore, the observers noted that the support by these Chinese cities signifies that there may be large-scale testing of the Digital Currency Electronic Payment (DCEP) later in the year.
Pilot Testing for CBDC in China
Beijing Mayor Chen Jining commented on the tests during the 15th Beijing Municipal People’s Congress. As stated in the Global Times report, the Mayor said that the capital would also support fintech and professional services in 2021. The Mayor further noted that the capital would also promote the pilot application for digital currency.
In addition, Shanghai Mayor Gong Zheng also declared the city’s support for the development of the digital yuan. The Shanghai Mayor commented on the digital currency while delivering a government work report on the 24th of January. The governor of South China’s Guangdong Province, Ma Xingui, has also joined Shanghai and Beijing in declaring support for the development of China’s central bank digital currency.
Already, the third round of pilot tests for digital currency occurred on the 20th of January in Shenzhen. For the test, about 20 million digital yuan was issued to people residing in Longhua District.
The Global Times report also cited a Shenzhen-based veteran industry finder, who said:
“The pilot testing is only the first step of a ‘long march.’ Once launched, the digital yuan will reshape China’s financial industry and unleash a promising digital finance service sector worth billions of yuan.”
Other Central Bank’s Effort on CBDC
The Central bank of France recently released the results of its CBDC pilot testing held on the 17th of December. The French central bank further noted that it would continue to conduct more tests in 2021.
2020 was a year of huge expansion for cryptocurrencies. Central banks globally reported progress in their efforts to create CBDC with encouraging results from trial tests. Several Chinese cities conducted tests for the CBDC in the past year. The cities include Shenzhen, Shanghai, Suzhou, Chengdu, and Xiongan New Area, North China’s Hebei Province.
As stated in an earlier report by Coinspeaker, the introduction of a CBDC would facilitate cross-border digital transactions among other benefits.
The crypto space also advanced last year as a result of the coronavirus pandemic. Several crypto assets surged significantly and recorded new highs. The top cryptocurrency, Bitcoin, continuously recorded highs and eventually all-time highs.
Read more: https://www.coinspeaker.com/big-cities-china-pilot-testing-cbdc/
