China’s Digital Yuan DCEP to Be Piloted in Shenzhen in 2020, Source Says
China’s central bank-backed digital currency, dubbed Digital Currency/Electronic Payment (DCEP), will be piloted in the country’s tech hub Shenzhen and Shanghai’s neighboring city Suzhou, according to local financial news outlet Caijing.
The pilot project is led by China’s central bank – the People’s Bank of China (PBOC) and supported by the four major state-owned commercial banks – Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB), as well as the three domestic telecom operators, namely China Mobile, China Telecommunication and China Unicom.
On the eve of the Spring Festival in 2017, the people’s bank of PBOC has tested digital bill trading on its in-system platform, in cooperation with five financial institutions including ICBC and BOC.
According to the Caijing report, the DCEP pilot this time will go out of the PBOC system and enter into real service scenarios in fields such as transportation, education and healthcare, etc. It will reach the C-end users and generate frequently used applications via the partner banks who could design their own trial scenarios based on their advantages.
“The institute of digital currency of the people’s bank of China has recently launched a ‘horseracing model’. On a voluntary basis, partner banks design the scenario and try it out first in Shenzhen, the model that runs fast and well might directly be adopted by the central bank,” people close to the pilot project team said.
The source above added that the trial (Shenzhen legal digital currency pilot) plan is going to proceed in two phases, the first of which will start at the end of this year (2019) with a relatively small scale, and the second phase will start next year (2020) in Shenzhen with a bigger scale.
On November 28, Fan Yifei, the deputy governor of the People’s Bank of China said at “the eighth China Payment and Settlement Forum” that the central bank has basically completed the top-level design, standard setting, function R&D, integrated testing related to its legal digital currency DCEP, the next step is to choose the pilot area, scenario and service range, yet prudently proceed with its application.
If all goes according to the plan, China’s central bank will make substantial progress on digital currency.
A tech savvy from a large technology enterprise told Caijing that cloud technologies are indispensable for the central bank to develop digital currency, and the influence of Huawei Cloud in China should not be underestimated. He said that the scenes of digital currency application involve a lot of edge computing, terminal use, mobile wallet, etc.
Speaking of choosing Shenzhen as the pilot area, Huang Yiping, deputy dean at institute of national development of Peking University, said that as the world’s leading technology and financial innovation hub, Shenzhen will play an important role in the experiment of digital currency, which will not only further enhance Shenzhen’s innovation ability, but also contribute to the country’s financial strategy.
Aside from Shenzhen, Suzhou, a city neighboring Shanghai in southeastern China, will also first test the much-anticipated digital currency, as reported by Caijing. According to recent public information, the Yangtze River Delta Fintech Co LTD, a subsidiary of the People’s Bank of China located in Suzhou, has been looking for blockchain-related talents.
“It (DCEP)’s picking up speed all of a sudden.” Several bankers commented on the progress.