China’s four largest banks trial digital currency payments

By Li Xuanmin Source: Global Times Published: 2020/8/6 18:23:41

digital currency Photo: VCG

Major Chinese commercial banks in Shenzhen, South China's Guangdong Province, have started testing the application of the central bank-backed digital currency in recent days among their internal employees, under which the Digital Currency Electronic Payment (DCEP) is used for payments and transfers, industry observers confirmed with the Global Times.

Employees at those banks can download a digital wallet app named "digital RMB" for the digital currency's closed trial, and each digital wallet account has a corresponding code that is linked to the employee's identity, an executive of a Shenzhen-based blockchain company who spoke on condition of anonymity, told the Global Times Thursday. 

The banks enlisted in the test include the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, the reported Wednesday. 

Users can top up the digital wallet by online banking or by using their bank card. So far, the app is not available for public downloads.

The application of DCEP in the tests includes topping-up, withdrawing deposits, transferring payments and paying by QR code, although tests for the last function are rare due to limited consumption scenarios.

In particular, the digital currency's payment transfer can be completed only by typing the telephone number of the recipient, and employees are also testing the function without network support, reported.

The report also quoted an insider at a bank as saying that the organization is also testing functions such as paying Party membership dues and labor union expenses.

Wang Peng, assistant professor of the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times Thursday that the tests in Shenzhen's banks are to determine whether the digital wallet is safe, reliable and can protect users' personal privacy.

"How to smoothly connect with the digital currency system of China's central bank and distribute DCEP is also a focal point for testing," Wang said. 

In addition to Shenzhen, the pilot tests of the central bank's digital currency are ongoing in Suzhou, East China's Jiangsu Province, Chengdu, capital of Southwest China's Sichuan Province as well as in the Xiongan New Area in Hebei Province.

An industry insider told the Global Times that while the tests in Shenzhen involve fee payments in banks, the trials in Suzhou and Chengdu focus on transportation subsidies in state-owned enterprises and online-offline consumption. In Xiongan, the tests primarily highlight the digital currency's clearing function.

The People's Bank of China (PBC), China's central bank, said Monday that the closed trials of DCEP had been launched successfully. In the second half, the PBC will proactively promote the research and development of DCEP. 

China has been accelerating the push to launch its digital currency in recent months amid strained relations with the US. Some analysts said the cryptocurrency is a way for Beijing to create a parallel digital currency system to challenge US dollar hegemony.

"China is taking the lead in the global race thanks to an early start," Wang said. 

In recent days, G7 countries have reportedly been promoting cooperation on central bank digital currencies (CBDCs) and will discuss the issue at the annual G7 summit that is scheduled for late August or early September.


blog comments powered by Disqus