China is one of the few countries that has been actively working on its central bank digital currency (CBDC) project. Within a short time, China’s Central Bank has tested its digital Yuan in different cities across the country. At a point, it became a concern that was raised during the first G7 ministerial meeting held on Feb. 7.
China is planning to expand its digital Currency, Electronic Payment (DCEP) to Chengdu, the capital of Sichuan province. China’s digital yuan is currently at the testing phase. According to some reports, the coming trial is going to be the largest so far.
As part of the test, the digital currency will be used as a payment medium in addition to cash. Therefore, the Chinese government issued the digital currency to residents and encouraged retailers in the region to accept it. The government released over 40 million digital Yuan for the test. The Chengdu trial is set to run from March 3 to March 19. It will involve more than 11,000 businessmen in Sichuan province and also JD.com, the largest online retailer in China.
China Speeding up its Digital Yuan Development
Many countries are putting much effort into CBDC development due to the increasing demand for Bitcoin regulations. In view of that, China’s Central Bank is speeding up its digital currency development. Right now, it is leading other countries in that regard.
China’s digital yuan development is already moving towards full adoption. Since the county’s DCEP trials started in October 2020, the digital Yuan has been used in over 3 million transactions, which is worth a total of $160M.
Many residents have questioned if the digital currency will compete with other payment platforms like AliPay. However, People’s Bank of China Nu Changchun said such payment platforms are wallets while the digital currency is the “money in the wallet”. Therefore, they can all coexist.