China to test digital yen before 2020

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The rumor is that China’s central bank is planning to conduct the first real-world test of its digital currency (CBDC) before the end of 2019, which means it is imminent.

According to Cointelegraph and local Chinese media, the initial pilot for the CBDC is set for the city of Shenzhen and may possibly include the city of Suzhou. The press release says, “Under the auspices of China’s central bank the People’s Bank of China (PBoC), four major banks and major economic participants such as China Telecom will test digital currency payments.“

Local media publication Caijing, says, “One step will be to rationally select the pilot verification area, scenario and service scope, and steadily promote the introduction and application of digital form of fiat currency.” In its article, it also states, “Compared with the previous pilot, this time the central bank’s legal digital currency pilot will go out of the central bank system and enter real service scenarios such as transportation, education, and medical treatment, reaching C-end users and generating frequent applications.”

Apparently, in Shenzhen, the PBoC is encouraging competition between the banks, because each bank will manage the digital currency differently, thus competing against each other in order to secure wider adoption for its model in the future.

One of the most exciting things about this pilot for all digital currency enthusiasts is that this is a world first. China’s central bank will have won the race to deliver a national digital currency before other countries. There are some criticisms of China’s plans with some analysts noting that interoperability could be a potential major sticking point in China’s plans. Still it is such a momentous moment that Cointelegraph has even launched a dedicated subsidiary publication, Cointelegraph China, to cover developments in the Chinese space.

We’ll also be watching this space with interest.

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