By
Chimamanda U. Martha
April 15th, 2024
PBoC confirmed it will be testing a mobile application for storing and exchanging the digital yuan, after screenshots circulated on social media. Internal tests will be done in Shenzhen, Suzhou, Xiong’An, and Chengdu
The People’s Bank of China (PBoC) said it is intending to add the Tencent-backed food delivery giant Meituan Dianping to its list of platforms that will begin testing the use of digital yuan in the real world.
Meituan Dianping is a Beijing-based food delivery platform that right now has more than 435 million active users and billions of dollars of daily transactions. This makes a rising possibility for the mass adoption of the digital yuan, which is also called the Digital Currency Electronic Payment or DCEP.
According to the sources familiar with the situation, Meituan has already been negotiating with the research arm of China’s central bank. the Digital Currency Research Institute. About a possible use-cases for its central bank digital currency (CBDC). Be it as it may, both parties still have to define the details about this newly made partnership.
The Tencent-backed video streaming platform Bilibili is also allegedly in discussions with the PBoC in order to test the digital yuan. Some time ago, one of the largest ride-hailing applications DiDi also decided to bust into the project.
PBoC Hasn’t Provided Digital Yuan Release Date Yet
The PBoC had already made it clear that it doesn’t have a concrete launch date for the digital yuan. However, the central bank and its research wing have been rising their efforts to explore the use cases of the CBDC in the real world.
In April, there were plenty of rumors about the launch of a wallet application across four Chinese cities: Shenzhen, Chengdu, Suzhou and Xiongan in order to initial test the digital currency.
China’s rise toward testing and launching its digital currency has accelerated even more during the pandemic. In June, the former vice-chair of the PBoC’s National Council for Social Security Fund, Wang Zhong min, stated that China had finished the backend development of its CBDC. The government had also started constructing laws for the same in March this year.
Meanwhile, Xiao Gang, the former chair of the China Securities Regulatory Commission, stated in his latest book on China capital market reforms that the development of a central bank digital currency (CBDC) will surface the way for digital stocks.
He stated that the stocks and currencies are separate entities in traditional finance. However, blockchain-based digital currencies dim the limits between those two and are offering new capabilities. Xiao said that “digital stock is the natural product of digital currency in the future.”
He said:
“Digital currency will bring impact and influence on currency issuance, circulation, settlement, asset pricing, asset trading and other systems attached to currency in various countries and regions.”
UK and Japan Contemplating CBDC
Be it as it may, the Japanese government said it also expects to include deliberation of a central bank digital currency (CBDC) in its official economic plan. The news came just after the Bank of Japan’s announced that it will start experimenting with the digital yen to check its feasibility from a technical perspective.
But, in order that all isn’t tucked in the Far East, the Bank of England also stated it is considering the issuance of a central bank digital currency, CBDC.
Its governor Andrew Bailey stated:
“We are looking at the question of, should we create a Bank of England digital currency. We’ll go on looking at it, as it does have huge implications on the nature of payments and society. I think in a few years time, we will be heading toward some sort of digital currency.”
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