China tests digital yuan in $162m pilot transactions

The People’s Bank of China conducted tests of the national digital currency (CBDC) in pilot transactions totaling 1.1 billion yuan (~$162 million), according to South China Morning Post.

According to Fan Yifei, deputy head of the People’s Bank of China (PBoC), since the testing began the payment system based on the digital yuan (DCEP) has processed 3.13 million transactions.

Fan confirmed information about the launch of pilot programs in several major cities, including Shenzhen and Xiong’an, noting “positive progress”. He also said about plans to use the digital yuan at the Winter Olympic Games in Beijing in 2022.

The deputy head of the PBoC said that to date the regulator has tested 6,700 different use cases for the new payment instrument, including bill payments, transport and government services.

CBDC payments use barcodes, facial-recognition technology and contactless transactions.

“The PBoC regards the digital yuan as the financial infrastructure of the future,” Fan said.

The official cited data showing that within the pilot transactions more than 113,300 personal wallets and about 8,800 corporate wallets have been created.

Earlier, China intends to outpace other countries and be the first to issue a CBDC, including to displace the dollar on the world stage.

China’s successes intensified the ECB’s efforts to issue a digital euro. The Fed expanded its research into digital currencies. The Bank of Japan has formed a working group to study central bank digital currencies

How and why central banks create digital currencies (CBDCs)

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