China’s Uber, Didi May be the First Private Company to Trial a CBDC, and More are Joining
Didi Chuxing, China’s largest and world’s second-largest taxi hailing service provider, has partnered with the country’s central bank to jointly study and explore the application of digital yuan in the field of smart travel.
The ride-hailing juggernaut announced July 8 that the company has entered into “a strategic partnership” with the Digital Currency Research Institute of the People’s Bank of China (PBoC) to work on the innovation and implementation of the forthcoming digital yuan/DCEP in transportation.
Together, the two parties hope to build a cooperative relationship and give play to their respective advantages to promote the ecological construction of digital yuan in diversified travel scenarios.
No more detail about the pilot plan has been revealed. Sources said that the trial of digital yuan on Didi will continue to follow the pace of test run on a small scale and limited scenarios.
The cooperation between Didi and PBoC’s DCEP think tank would make Didi the world’s first private company to accept payments in a central bank digital currency.
More internet companies reportedly joining the digital yuan project
As the forthcoming digital yuan project steps up efforts in exploring various landing scenarios, internet giants with high traffic are becoming premium platforms for its implementation.
Known as the Uber of China, Didi claims to have 550 million users across Asia, Latin America and Australia. Apart from providing services in public transportation and food delivery, the company’s latest reported plans reveal it would create an autonomous vehicles subsidiary and release more than one million self-driving cars by 2030.
Previous reports have indicated that the DCEP pilot 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.
Apart from the ride-hailing giant, insiders disclosed that companies including Meituan and Bilibili have both begun to cooperate with a number of banks involved in the digital yuan project.
Meituan is a major service platform with over 240 million consumers and five million local merchants, and Bilibili is known as China’s largest video sharing site extremely popular among the young Chinese.
In addition, internet giants like ByteDance are also said to be in close discussions with the banks about DCEP collaboration.
China is making steady progress in DCEP
Since 2014, China’s central bank PBoC has set up a special team to study issues regarding the framework of digital yuan issuance, key technologies, circulation environment and relevant international experience.
At the end of 2017, the PBoC was approved to organize some mighty commercial banks and institutions to jointly develop the digital yuan, dubbed Digital Currency/Electronic Payment (DCEP).
So far, DCEP has basically completed the work on the top-level design, standard formulation, functional R&D and joint test under the premise of adhering to the principles of two-layer operation, cash (M0) substitution and controllable anonymity.
In April this year, a screenshot of a test page of the Agriculture Bank of China’s DCEP wallet was widely circulated, which shows that the bank’s DCEP wallet supports functions such as digital asset exchange, digital wallet management and digital currency transaction record inquiry, as well as basic functions such as code-scanning payment, remittance receipt and payment, etc.
Since then, several major media outlets have reported that the PBoC and Agricultural Bank of China have carried out plans to pilot test DCEP on a small scale in Shenzhen, Suzhou, Xiong’An New Area, Chengdu and the future site of the winter Olympics.
Nevertheless, there’s still no official launch date for the DCEP and no application scenario has been officially open to the public in the market.