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DiDi, being the dominant ride-hailing in China with its over 500 million users, would offer the first real application of Digital Currency Electronic Payment (DCEP).
China’s about to launch its Central Bank Digital Currency (CBDC) known as digital yuan and it is set for another round of trials as DiDi, a ride-hailing platform in the country, is joining the game.
This has become known from Didi’s announcement on Wednesday, where they revealed that they had signed an agreement with People’s Bank of China‘s Digital Currency Research Institute to test the digital yuan. Primarily, the agreement between Didi and PBoC is to accelerate the application of the CBDC, also known as Digital Currency Electronic Payment (DCEP).
The ride-hailing giants said that DCEP would become a vital infrastructure of the digital economy. They said further that they would work alongside the PBoC to promote the integration of the digital economy with the real economy.
DiDi to Test Digital Yuan
DiDi, being the dominant ride-hailing in China with its over 500 million users, would offer the first real application of DCEP owing to its large user base. Details of the digital yuan implementation are yet to be made public. The ride-sharing service provider with Softbank and Apple sponsorship merged with other local rivals in 2015 and acquired Uber‘s business in China a year after.
DiDi’s partnership with PBoC is a key milestone in its ongoing initiative, the firm said. They said the purpose is to enhance the interconnectivity of the online and offline economic sectors in China, as the government seeks to support the development of the real economy sectors with innovative financial services.
Apart from the DCEP test, DiDi already enables Alipay and WeChat Pay on its platform as the digital yuan would no doubt make a good addition.
PBoC and Its Work on CBDC
Although China has been a crypto critic country, however, it has smiled on the idea of a CBDC and has been under development since 2014. Being developed by the PBoC, China’s CBDC has gone far and almost near completion, unlike the cases of other countries that are also developing their CBDCs.
PBoC has already partnered with seven state-owned companies, including four commercial banks and three telecom giants, to test the digital yuan. Reportedly, certain evidence also showed that China’s four largest state-owned commercial banks have been on development and test run for a wallet application that’ll be used to store, send, and receive the DCEP.