China’s ongoing digital yuan test is set to begin in other acclaimed prosperous provinces in China including Beijing and Tianjin Wall Street Journal reported.
Reportedly, the country’s Commerce Ministry announced the move as the government expands its pilot testing for the digital yuan. Outside Beijing and Tianjin, other regions the digital yuan test would begin are Hebei province in the north; the Yangtze River Delta to the South; and, along China’s wealthy Southern coast, Guangdong province and the neighbouring cities of Hong Kong and Macau.
Other less prosperous provinces also that are able to fulfil prerequisite requirement would also come up with a model for the digital Yuan test very soon. Amidst all countries working on creating a Central Bank Digital Currency (CBDC), China is at the forefront of the race after it began testing this year.
Shenzhen, Xiongan, Chengdu, and Suzhou, where the four provinces the digital Yuan test started from in China. The currency was tested for settling transport, health, education, goods and services bills.
China’s digital Yuan
The digital Yuan is only an electronic copy of the country’s traditional currency, Yuan. Digitalizing the Yuan is to enable the currency achieve the Digital Currency Electronic Payment System (DCEP) plan.
DCEP is intended to bring about another era of a digitized economy in the face of advancing blockchain or distributed ledger technology (DLT). From scratch, China has not welcomed cryptocurrencies but subscribed to Blockchain technology. When plans were put in place to begin development of the digital yuan, the country planned to overhaul the digital payment ecosystem in the country. This was to strengthen the Yuan both locally and internationally.
Other countries continue to explore CBDC
After China, many other countries continue to explore digital currencies in different capacities. The world’s most populated country, however, after working on its CBDC for more than two years now is set to issue it to the general public.
Recently, the Bank of Japan declared interest in issuing a national digital currency. European Central Bank (ECB), Bank of Canada, Sveriges Riksbank Sweden’s central bank are some countries already working towards launching a CBDC.