The Chinese National Bank Will Conduct Tests for the Introduction of Digital Currency

The Chinese National Bank will conduct tests in several cities for the introduction of digital currency, according to material from the Caijing magazine.

The first test is scheduled for the weeks before the end of the year in Shenzhen and will cover some of the country's largest banks and telecoms, according to an anonymous source close to the project. Subsequently, the city of Suzhou in Zhejiang province will also be included in the project, and next year the trial use of the national digital currency will be expanded to more areas. Internet giants Alibaba and Tencent will also participate in the project, according to the material.

In October, Chongqing’s former mayor told a financial forum in Shanghai that the CNB would likely be the first national bank in the world to launch its own digital currency.

According to Cao Yin, deputy director of the Tsinghua University Blockchain Research Institute, digital currency competition will not only intensify between central banks and governments in 2020, but will also include corporations such as Facebook and transnational financial institutions. 

"In particular, PBC has accelerated the schedules on the DCEP after Facebook announced its Libra global currency, out of concerns that Libra might take the initiative in the global crypto token contest," Cao told the daily.

"By launching a digital currency earlier than other countries, the PBC will be able to set rules related to currency's cross-border clearing and payment system," said Tu Yonghong, a professor at the International Monetary Institute at Renmin University of China.

According to other Chinese experts, the creation of a digital currency of its own will accelerate the yuan's clearing, attracting wider adoption of the currency.

In September, US television CNBC quoted representatives of several large companies that Chinese digital currency would improve the global position of the yuan.

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