China Pushes For Faster Launch of Digital Currency

The Shenzhen government is issuing 10 million yuan worth of digital currency for testing as part of ongoing DC/EP pilot tests.

The PBOC (People's Bank of China) has called for an accelerated nationwide launch of its sovereign CBDC (central bank digital currency) to help the country build an independent and high-quality financial infrastructure.

Central bank deputy governor Chen Yulu says China should accelerate ongoing testing of the so-called DC/EP (Digital Currency Electronic Payment) in selected cities to ensure that a digital yuan quickly becomes part of a 'dual circulation strategy'.

"We must serve dual circulation with fintech-led innovations. We must build an independent and high-quality financial infrastructure … quicken the pace of research and development of the central bank digital currency, and ensure that pilot tests show is controllable and safeguards the security of payments," Chen said.

A faster launch of the CBDC and countrywide implementation of the DC/EP is expected to help China to "insulate itself from geopolitical tensions" with countries such as the US, and place it ahead other regions that are currently developing or testing their own sovereign digital currencies.

In Shenzhen, the local government has offered CNY 10 million (USD 1.5 million) in coupons to residents to test the digital currency as part of the ongoing DC/EP pilot test in the city.

The Shenzhen government through the PBOC is to issue 50,000 digital coupons (or "red envelopes") valued at CNY 200 (USD 30) each for use in the pilot tests.

Earlier this month, PBOC outlined progress from digital yuan pilot tests, announcing that over 113,300 personal and 8,000 corporate digital wallets have been opened since the start of DC/EP tests.