DC/EP trials may start in Yangtze River Delta, Greater Bay Area: expert

By Chu Daye Source:Global Times Published: 2019/11/28 18:23:40

A view of the PBC building in Beijing Photo: VCG

Trials of the Chinese central bank's digital currency/electronic payment (DC/EP), could start in the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, two of China's most developed regions, an insider in the blockchain sector told the Global Times on Thursday.

The comments come after a top People's Bank of China (PBC) official unexpectedly unveiled detailed progress the country had made toward the final roll-out of its digital currency.

Work including the top-down design, standardization and testing have been basically completed, news site Yicai reported on Thursday, citing PBC Vice Governor Fan Yifei.

Fan, who made the remarks at a forum, also revealed that the next phase of work involves picking viable locations for trials and scenarios where the new digital currency will be used, under the principles of gradual progress, security and risk control.

Fan said the roll-out of the government-backed cryptocurrency will be in a steady manner as the DC/EP's function is fine-tuned during the trials.

"The two regions are China's most advanced areas, with their sophisticated manufacturing, consumption and logistics industries," Cao Yin, an insider in the blockchain sector, told the Global Times on Thursday. 

"They also have the best city governance and host the highest intensity of financial institutions," Cao explained, alluding to the recent establishment of cryptocurrency research arms by the PBC in Shenzhen, South China's Guangdong Province and Hangzhou, East China's Zhejiang Province.

Experts said Fan's message is significant as the PBC is poised to become the first central bank in the world to issue a digital currency, in the wake of Facebook's Libra cryptocurrency plan that some said could challenge other countries' financial sovereignty.

Unlike Libra, China's DC/EP will be backed by domestic banks, financial institutions and third-party payment firms.

Cao also revealed that teams from China's Big Five state-owned banks, including the world's largest bank - Industrial and Commercial Bank of China - are visiting the two cities to "connect" their systems with existing domestic DC/EP systems.

"Big banks will be the first financial institutions to begin the trials," Cao said.

Zhou Xiaochuan, former head of the PBC, said at a forum on Tuesday that the major use scenarios of DC/EP in the initial phase will be retail and cross-border payment. 

Region-wide trials will contribute to the further integration of the two regions in line with stated government goals, Cao said.


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