China Ready for Launch and Deployment of Digital Yuan

China's currency

The People’s Bank of China (PBOC) announced on Monday 21 September that its central bank digital currency (CBDC) is ready for launch.

Local news outlet China Banking News referred to a previous article published by PBOC’s Financial News on 19 September. The article said that the bank had “completed technical preparations” for the CBDC, which already “satisfied conditions for deployment.”

The PBOC started research into a statutory digital currency in 2014. By January 2017, it had established a Digital Currency Research Institute, according to the article.

China’s goals for the digital currency go far beyond its borders, according to Modern Consensus.

In the same vein, Reuters reported that China is eager to become the world’s first nation to issue a CBDC. It formally called its CBDC the Digital Currency Electronic Payment (DCEP) system. This comes in an attempt to internationalise its fiat currency and reduce its reliance on the dollar’s financial infrastructure.

Meanwhile, the PBOC said the rights to issue and control a digital currency would become a “new battlefield” of competition between sovereign countries, Reuters cited China Finance.

Moreover, it added in an article that the issuance and circulation of the digital currency would bring great changes to existing international finance.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track.”

Earlier steps

In August, media-outlets reported that four of China’s big state-owned banks have started testing an app for the new CBDC. These banks in­clude the Agri­cul­tural Bank of China (ABC), ICBC, Bank of China (BOC), and China Con­struc­tion Bank (CCB). 

This step came after the PBOC announced in April that it started internal testing of CBDC at various locations. These locations included Shenzhen, Suzhou, Xiong’an New District, and Chengdu, as well as at sites for the Winter Olympics

In addition, the bank submitted 22 patent applications during April covering digital currency issuance. It offered 65 concerning currency circulation, and 43 on applications, resulting in the formation of a “complete industry chain.”

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Hanan Hamed 48 Articles
a bilingual journalist. She writes in both Arabic and English. She has been writing news and features for 7 years now. She is specialized in business and economic news.