China’s Central Bank to Test Its Digital Currency With Commercial Banks, Telecom Firms: Repot

Francisco Memoria

The People’s Bank of China (PBoC), China’s central bank, is reportedly looking to test its digital currency, dubbed digital currency electronic payment (DCEP), later this year with the help of commercial banks and telecommunications firms.

According to a report published by Chinese financial news source Caijing, the central bank is set to test the digital yuan in the cities of Shenzhen and Suzhou with the help of its “big four,” which are the Bank of China, the China Construction Bank, the Agricultural Bank of China, and the Industrial and Commercial Bank of China.

The digital currency’s tests will also see three telecommunications firms – China Telecom, China Mobile, and China Unicom – cooperate. During the test the DCEP is set to be applied in real-world scenarios such as transportation, healthcare, and education.

There will be two pilot phases, with the first one set to take place before the end of this year on a small scale. The second one is reportedly going to be a large-scale effort in Shenzhen, and if it goes well the DCEP could go live soon after.

The People’s Bank of China is believed to have been hastening efforts to develop its digital currency partly because of the Facebook-led Libra cryptocurrency’s announcement. Libra is set to be backed by a basket of currencies and short-term U.S. Treasury bonds

As CryptoGlobe covered the digital currency will, according to a PBoC official, provide its users with “controlled anonymity.” Chinese officials have also made it clear the currency’s holders won’t receive interest payments.

Featured image via Pixabay.