China to test digital yuan in two cities

People’s Bank of China, the country’s central bank, will begin trials of its digital currency for electronic payments (DC / EP) in the cities of Shenzhen and Suzhou in end of 2019.

Local edition Caijing reported, that to launch a pilot project, the NBK began to cooperate with seven state-owned enterprises, three telecommunications companies and four private banks. The Central Bank motivated the project participants to develop their own implementation strategies.

The pilot program will affect the areas of transport, education, trade and medical services. Some banks have also decided to partner with telecommunications companies to develop SIM cards with embedded digital wallets, while others have created their own storage applications..

According to Caijing, the early tests of digital currency in Shenzhen will start at the end of this year, and in 2020 the project will begin to actively promote.

China to test digital yuan in two cities

The DC / EP model stipulates that in order for commercial banks to receive digital yuan, they first need to reserve an equivalent amount of fiat in the NBK. Further, citizens and companies can open wallets in these banks in order to be able to use the new means of electronic payment.

In addition to China, European countries have also stepped up work in this direction, fearing competition from the Facebook Libra cryptocurrency. The Bank of France said last week that it will test its digital currency in the first quarter of 2020..

text: Ivan Malichenko, photo: Shutterstock

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