China is expanding the trial of its upcoming Central Bank Digital Currency (CBDC) dubbed the Digital Yuan. Recent reports have revealed that multiple Chinese cities are planning to trial the nation’s Digital Currency Electronic Payment (DCEP).
As of now, two of the nation’s largest cities – Beijing and Shanghai – are expected to join China’s Digital Yuan project, according to Chen Jining, Mayor of Beijing. Jining added that the nation’s capital will accelerate the development of innovative demonstration zones for fintech and professional services in 2021 while promoting the CBDC.
While delivering a government work report, Gong Zheng, Mayor of Shanghai, noted that the city will “continue financial opening-up and the promotion of the digital currency.” Shanghai has been actively boosting blockchain development. Lately, the city’s municipal government invested $5 million in Blockchain startup Conflux to develop the only permissionless blockchain project backed by the Chinese government.
Meanwhile, Ma Xingrui, governor of South China’s Guangdong Province, added that authorities will work towards the development of Shenzen “into an innovative pilot zone for the country’s digital currency.”
Shenzen is also planning another public trial for the CDBC, this time giving away 20 million digital yuan via its “red envelope” giveaways. Businesses and employees of enterprises staying in Shenzhen’s Longhua district during the Spring Festival can apply for the lottery.
Winners of the lottery would be able to spend the digital currency at 3,500 stores equipped with the appropriate point-of-sale technology via an app that is available for download.
Part of a Bigger Plan
According to industry experts, these moves by the government are indicative of a larger plan that’s coming into play, of testing the DCEP on a wider scale in 2021. This will lay a strong foundation for the final launch of the CBDC.
“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,” said one industry veteran.
As previously reported by The Daily Chain, digital yuan now also supports ATMs. The Agricultural Bank of China is allowing ATM machines in select Shenzen branches to convert customer funds from their savings accounts or cash into digital yuan via their smartphones and vice versa.