PBOC Plans on Building a Legal DCEP Test Zone in Beijing
Internal pilot programs for testing out use cases for the digital yuan have been going on for almost an entire year in China. Both small local entities and large provincial governments have launched their own programs, which ranged from establishing research and development teams to conducting a digital yuan giveaway worth millions of yuan.
And now, according to the latest reports, China’s national bank, the People’s Bank of China, plans on launching what could be one of the largest and most serious tests of its upcoming digital yuan, the DCEP. News of this large-scale pilot project first broke on Monday, when two large regional governing bodies held a joint conference. According to a report from Sina Finance, the Beijing Local Financial Supervision and Administration and the Tongzhou District government discussed the country’s “two districts” policy, which focuses on developing the financial industry in the nation’s capital.
The policy is considered to be a major milestone for Beijing, as it initiated a total of 102 liberalization and innovation initiatives in the nation’s capital. Among those initiatives is a city-wide digital yuan pilot project orchestrated by the People’s Bank of China, which is set to mimic a similar effort conducted in the city of Shenzhen last month.
During the conference, it was revealed that the People’s Bank of China Digital Currency Research Institute had plans to build what it calls a “legal digital currency test zone.” While no further details about what constitutes “legal” were given during the conference, local reports showed that the digital yuan testing in Beijing is part of the latest state-level planning regarding the upcoming digital currency. Beijing, according to reports, is the latest city to be included in the pilot “free trade zone” the country wants to establish in its large financial centers such as Shenzhen, Guangzhou, Shanghai, and others.
These cities will all see parts of the “two districts” financial policies applied to them. According to a report from Sina Finance, the policy will include, among other things, implementing new technologies in areas such as payment clearance, credit rating, asset transactions, and data management. Blockchain technology, as mentioned during the conference, will play a significant role in facilitating these policies, as most of them are set to utilize the upcoming digital yuan.
Given the fact that Yu Gang, the governor of the People’s Bank of China, recently said that digital yuan trials across the country have so far successfully processed over four million transactions worth as much as $300 million, initiating a similar trial in Beijing could significantly increase this number. Out of the four million transactions, at least 3.12 million have been processed in the six days from Oct. 12 to Oct. 18 during the so-called “red packet” digital yuan distribution in Luohu.
With over 21.5 million people living in China’s capital, using Beijing as a testing ground for the digital yuan will bring it closer to significantly more people than in Luohu and push China to the forefront of digital national currency development.