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China to Pilot Digital Yuan in These 28 Cities, Said Commerce Ministry

The long-anticipated digital yuan will be piloted in more cities across the country, announced China’s commerce ministry on Friday August 14.

The pilot cities announced this time are no longer limited to several heavyweight cities previously reported but with a large number of places included.

According to the official statement, these cities include those in the northern Chinese region of Beijing-Tianjin-Hebei, eastern region of Yangtze River Delta, “Greater Bay Area” around the Pearl River Delta, and some cities in Midwestern China where conditions are met.

The document makes it clear that digital yuan will be piloted in aforementioned cities, and said that the People’s Bank of China (PBoC) shall formulate policy safeguards. Cities like Shenzhen, Chengdu, Suzhou, Xiong’an New Area and future winter Olympic scenarios will assist in the pilot project, and then it will expand to other regions as the case may be.

On hearing the news, the digital currency-related stocks in the country surged. By midday, the digital currency sector was up 2.65% at 1429.12, with several stocks rising nearly 10%.

The spate of digital yuan related news over the past few months indicates that the DCEP might have been ready to come out.

Earlier this month, 8btc has reported that China’s major state-run commercial banks had been conducting large-scale internal testing of the digital wallet designed for the digital yuan, which indicates a step closer to the official launch of the country’s central bank digital currency.

On August 3, the PBoC pointed out in a video conference for the second half of 2020 that the “closed trial of legal digital currency has been successfully launched” in the first half of the year, and the research and development on it will be “actively yet prudently promoted” in the second half.

In April, employees of administrative units in Xiangcheng district in Suzhou city were reportedly required to install a digital wallet to receive 50 percent of their transport subsidies in the new digital currency.

The digital economy is an increasingly important driver of global economic growth. The R&D and application of legal digital currency are conducive to efficiently meeting the demand of the public in the digital economy, improving the convenience, security and anti-counterfeiting level in retail payment, and boosting the development of China’s digital economy.

As early as 2014, the People’s Bank of China has set up a special team to study issues regarding the framework of digital currency issuance, key technologies, circulation environment and relevant international experience. In 2017, the PBoC organized some heavyweight commercial banks and institutions to jointly develop the digital yuan (also referred to as DC/EP) system. DC/EP has basically completed the work of top-level design, standard formulation, functional research and development, joint testing under the premise of adhering to two-layer operation, cash (M0) substitution and controllable anonymity.

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